FSC CEO resigns

Richard Klipin has announced his resignation as CEO of the Financial Services Council of NZ (FSC).

Klipin has led the FSC for the past seven years and he will remain in the role whilst the Board starts the search process to find a replacement.

Rob Flannagan, Chair of the FSC, says

“Under Richard’s leadership over the past seven years we’ve developed from a small organisation of 29 members to one that is now has 119, and living its purpose as the clear voice of the financial services sector and growing the financial confidence and wellbeing of New Zealanders.

Richard has led this renewal in vision, strategy and purpose; and his strength as a community builder is evidenced by the active involvement of over 540 members across the many FSC Commitees, forums and working groups.

Richard is leaving the FSC in great shape, with a new strategic plan and a ‘Blueprint for Growth’ policy platform that unites the sector, and has support and backing from government and regulators.”

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Links between financial and mental wellbeing

Beyond Blue have produced a guide for those who work in the finance and mental health sectors to inform them of the relationship between money and mental health. The guide was produced as the ‘Money and Mental Health: Social Research Report’ – a collaboration between Beyond Blue and the Australian Securities and Investments Commission (ASIC) – found people experiencing financial challenges are at least twice as likely to encounter mental health issues than those who aren’t. While the guide has information on what services are available in Australia, we’ve pulled out some insights that are likely to correspond to the New Zealand market.

In 2023, 37% of people living in Australia reported that cost of living pressure was the issue having the greatest negative impact on their mental health. The productivity commission found that poor mental health is currently costing Australia up to A$70 billion a year. Small businesses accounted for over 97% of the 2.6 million Australian businesses in 2021-22 (similarly, 97% of all NZ businesses have fewer than 20 employees). In Australia, 22% of small business owners were diagnosed with a mental health condition.

One of the key takeouts is that financial challenges can cause a decline in mental health, and mental health challenges can cause a decline in financial wellbeing. The guide illustrates how people struggling can get into downward spirals that can progress faster than those experiencing them anticipate, and it can be hard to stop or reverse them.

While anyone can be affected by money and mental health issues, there are several population groups who experience disproportionate risk, including young people, first nations people, women, culturally diverse communities and small business owners. Those who fall into multiple groups are even more susceptible to financial and mental health challenges. The guide covers some of the key reasons why these population groups are at higher risk.

They give examples of ‘turning points’ – interventions or experiences that have led to improvements in people’s financial wellbeing and/or mental health. They showcase a major Australian bank that refocused their collections department on providing solutions that respond to root causes of mental and financial hardship and the turnaround was dramatic. Within 90 days of starting the program, 97% of customers were back on track with financial commitments, employee engagement soared by more than 25% points, and they had an AUD$70 million reduction in costs associated with loan defaults and operational efficiencies.

Beyond Blue have developed a continuum that can help you evaluate a person’s financial and mental wellbeing and suggestions on what you can do support them to move towards a more mentally and financially healthy future. If you or someone you know needs mental health support or is experiencing financial challenges, there are a range of organisations and resources available to help in New Zealand, you can find out more here and here.

Swiss Re write about Health and Wellness engagement impacts

Swiss Re have published a report on how to engage customers with a health and wellness programme. They write how the proliferation of health apps and wearables has led to consumers having more data about their health and lifestyle than ever before. Two thirds of consumers are open to sharing personal data or health results in return for a benefit, whether that’s personalised health advice, discounts or something else.

For insurers there are many benefits, from increasing the frequency of touchpoints, building customer loyalty and maximising lifetime customer value. For consumers the benefits include more relevant products, better price points, meaningful financial incentives and rewards and, best of all, improved health and longevity.

Swiss Re calculated that a successful program with a 25% engagement rate can be ROI positive, after accounting for the costs of launching and running the health and wellness engagement programme including policyholder rewards, premium reductions, initial setup costs and ongoing costs. If engagement rises to 40%, profitability can be up to 9% higher compared to not having a programme in place.

John Hancock in the USA is hiring behavioural scientists and drawing on gamification elements to help encourage policyholders to lead healthier lives. For example, when customers hit an activity threshold they can spin a wheel to win rewards.

Insurance Thought Leadership discuss the success of the Vitality programme. Vitality aims to increase people’s healthspan, the time in a person’s life where they experience optimal health, through a behaviour change incentive programme. Policyholders are nudged towards healthier lifestyle choices that they’re rewarded for in various ways including discounted premiums, discounts at places like gyms and free health checks. They list benefits of the programme to the insurer including reduced frequency and severity of claims, high engagement of policyholders and high levels of retention. Over the last three decades,

“Discovery's three-decade journey provides robust evidence that a significant increase in the level of physical activity reduces by 49% the mortality for individuals aged 45 to 65, and a remarkable 61% reduction for those older.  Positive impacts have further manifested within annual medical expenditures, where the most engaged participants have 15% lower claim costs than the less engaged, risk-adjusted by age and medical conditions. A longitudinal study on the people who showed a low level of physical activity during the initial six-month period showed a subsequent 14% reduction in hospital medical costs for the subgroup that notably elevated their engagement levels over the ensuing four and a half years.”

AIA NZ have recently released statistics on how AIA Vitality has contributed to notable shifts in health metrics. By September 2023 there was a 20% increase in members moving from an unhealthy body mass index (BMI) range to a healthier one. Similarly, there was a 51% improvement in blood pressure levels, 26% in cholesterol levels, and 81% in glucose levels.

Are kiwis taking more sickies?

The 2023 Workplace Wellness Report, a collaboration between Southern Cross Health Society and BusinessNZ, found a rising trend in staff using more of their sick leave entitlements.

The survey canvassed 137 organisations in the public and private sectors, who together employ a total of 135,742 people, 6.57% of all employees in New Zealand, about their employee absence data across 2022.

In July 2021 the statutory sick leave entitlement increased from five to ten days annually. Across 2022 employees took an average of 5.5 days off. This increased from the 4.2 to 4.7 days recorded between 2012 and 2020. It should be noted that 2020’s average of 4.2 days was the lowest, when lockdowns, social distancing and a nationwide focus on staying home when sick had a significant impact on results.  

Extrapolating figures from the survey to the national workforce, it translates to 10 million working days lost due to employee absence in 2022, up significantly from 2021’s 7.3 million estimate. Across the economy this equates to around $2.86 billion in absence costs.

The report cited the ongoing influence of Covid-19 and the encouragement to stay home when ill as one of the factors influencing 2022’s increased absence results. They found 2022’s mean result for the degree staff typically turned up for work with some form of illness when they should have stayed home was less than in 2018, 2016, 2014, and 2012 and an exact match for 2020. This bodes well that employees are putting more emphasis on taking care of themselves and limiting the spread of illness. The report also found that the proportion of enterprises who thought the culture of their business encouraged employees to stay home when ill has improved markedly since Covid-19 arrived, throughout all sizes of businesses.

However, they also note that ‘paid sickness absence days being viewed as an entitlement by those suspected to be not actually sick’ as risen up the ranking of main drivers of absence to reach number 7.

Anecdotally, people have been experiencing more sickness since lockdowns ceased than in years previous. Could this be part to blame for the increase in absences? Or is it simply that one of the lingering effects of living through a pandemic is a reluctance to come in to work when sick, when in the past employees would have just soldiered on?

Financial advisers’ mental health and wellbeing has improved, though still worse than the average NZ worker

AIA NZ has released a report looking into financial advisers’ health and wellbeing, following on from the research they sponsored in 2021. While overall wellbeing showed signs of improvement, stress was still a concerning factor. In 2021, government regulation was the highest cause of stress for advisers (61%); this year’s highest stressor was compliance, with 50% of respondents rating it as ‘highly’ or ‘very highly’ stressful. In both years, work overload was the second most stressful issue (at 42.2% in 2021 and 36.7% in 2023).

The number of advisers who have said they will continue in the industry has increased significantly, up to 93% from 84% in 2021. Work life balance has improved, with 37.2% of those surveyed working 35 to 40 hours per week and 8% less working over 50 hours per week compared to 2021.

The report includes a breakdown of where advisers spend their time, showing the wide variety of tasks that make up an adviser’s job. Only 12.23% of their time is spent on actually providing advice.

Recommendations for improving wellbeing and mental health include: seek help from industry support services; be an active member in networks; engage in recovery activities like exercise, meditation, hobbies, social activities; seek admin help to free up time to focus on client work; use systems that automate processes; get support from counsellors or psychologists when experiencing mental stress; minimise crossovers between work and home; and focus on the business.

Sharron Botica, AIA NZ Chief Partnership Distribution Officer, says

“…it’s encouraging to see signs of improvement across the board, however, the impact that stress is having on adviser health and wellbeing is a concerning factor which needs to be addressed,”

“We believe our role as leaders in the industry is to ensure our advisers have the tools and support to be mentally healthy, focus on their wellbeing, and have the opportunity to thrive and do what they do best every day.”

The research was conducted by Dr Adam Fraser, founder of The e-lab, and Dr John Molineux from Deakin University and participants included life and health insurance advisers, business owners, home loan advisers, investment advisers, risk advisers, sole trader advisers, and general advisers, aged 18 to over 60, who were either qualified, partly-qualified, or unqualified.

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Asteron Life and AIA awarded at the ANZIIF NZ Insurance Industry Awards

The Australian and New Zealand Institute of Insurance and Finance (ANZIIF) held the 11th New Zealand Insurance Industry Awards on 22 November.

Asteron Life were awarded the Life Insurance Company of the Year award. It is the fourth time they have won this award, having also won it in 2013, 2014 and 2021. Judges were impressed by Asteron Life’s Voice of Customer program, which provides insights into the customer experience; their high customer satisfaction scores overall; their policy wordings being accredited with the WriteMark standard; and attention to helping customers with affordable levels of cover. In particular the judging panel praised the variety of customer and people initiatives Asteron Life have implemented, ranging from Connected Care to Kids Cover to a Professional Supervision Programme.

AIA were recognised as winners of the Excellence in Workplace Diversity and Inclusion (D&I) and for Excellence in Environmental, Social and Governance Change. At AIA all leaders are expected to take responsibility for DE&I measures in recruitment, development, remuneration and the overall workplace environment. AIA recently achieved the Accessibility Tick and implemented a Menopause Tookit initiative. AIA has a five-pillar ESG strategy that incorporates sustainable operations, investment, health and wellbeing, people and culture and effective governance. They have committed to being net zero by 2050 and have already put in place many actions to work towards that goal, including new buildings aligning with green standards. They are committed to ethical investment and have a co-created employee wellbeing strategy in place.

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Survey finds small business owners are facing more wellbeing challenges than other NZer’s

A Xero survey has found that while kiwi small business owners are faring better than their overseas counterparts, they are facing more wellbeing challenges than other New Zealanders.

Of the seven countries surveyed, Kiwi small business owners ranked third in overall wellbeing rankings and first in overall life satisfaction. The survey found that NZ small business owners fared better than other countries when it came to financial distress, with just 14% experiencing financial distress most or all of the time and 28% never experiencing it.

There were age and gender-related differences in kiwis wellbeing as well as differences between sole traders and small business owners with employees. Under 30-year-old small business owners reported lower overall wellbeing than those over 50. Men were more likely to feel fulfilled by the work activities they engage in all or most of the time than women (63% vs 49%). Sole traders were found to have a lower life satisfaction level than small businesses employing staff.

The survey also found that running a small business is taking a toll on kiwis’ ability to take a break, with only 17% saying they can take a break when needed all of the time and 6% saying they are unable to take time off work regularly when needed. 35% of NZ small business owners found their personal lives disrupted by work more than half the time.

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nib release their 2023 State of the Nation Parenting Survey

nib have released their 2023 State of the Nation Parenting Survey, which has found parental concern for children’s mental health has skyrocketed and shows just how severely the current cost of living crisis is affecting families. The survey canvassed the views of 1,206 parents, step-parents and guardians across NZ in June 2023.

Some of the key findings include:

• 46% of all parents say their biggest worry for their children is the future state of their mental health (up from 40% in 2022).

• 57% say they are worried about their children’s current mental health.

• 49% of parents say they are concerned about their child’s physical health (which increases to 59% of Māori parents).

• Parents reported the top three physical health concerns impacting their children as sleeping problems (34%), behavioural issues like tantrums, problematic eating and bullying (28%) and diet and exercise (25%).

• 46% of parents have health insurance (up from 44% in 2022), with 64% having made a claim. Key reasons for taking up private health insurance were peace of mind (52%), quicker access to health services (48%) and confidence they can access health services (48%).

• 31% of parents are unable to access the support they need to address their child's health concerns.

The survey found that almost all kiwi parents were facing financial stress (93% of households).

• 49% of parents said financial uncertainty is the main source of household stress (up from 41% in 2022 and 35% in 2021).

• 66% of parents’ top concern for their kids’ future is cost of living.

• 19% of parents have gone without essentials such as petrol, heating or skipping meals over the last year.

• Food choices are being impacted by increasing financial pressures, with 52% of parents saying they are eating less or differently; 23% keeping grocery spend the same but eating less; 51% eating less fresh vegetables; and 40% eating more processed foods.

• Parents have said that increasing costs are negatively affecting their relationships and social lives with 31% reporting a negative impact on their relationship with their partner, 42% having their social lives and connection to friends negatively affected and 25% experiencing a negative impact on the amount of time spent with their children.

• 14% of families are choosing to delay having more children.

• 13% of families’ main caregiver is needing to return to work.

Nathan Wallis, nib’s resident parenting expert and neuroscience educator has some tips for families doing it tough right now.

“Parents are under increasing financial pressure and many feel like they don’t have the time, energy or resources to care for their kids and look after themselves but it’s really important that parents find ways to look after their own wellbeing”.

“It’s really important that parents look after their own mental and physical health so that they can show up for their kids. Proactively looking after your own health and wellbeing also has the added benefit of role modelling good behaviours to your kids. When parents role model healthy eating habits and exercise their kids tend to follow”.

 “It might be as simple as coming together for a family meal or taking the kids for a walk or kick a ball around at the park. These healthy habits are great ways to bond with your kids and set them up for success”.

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Fidelity Life makes three key appointments in its Sales and Service team

Fidelity Life has made three key appointments in its Sales and Service Team. David Winspear (left) has been appointed to take on the newly created role of Head of Channel Strategy and Michelle Doyle (middle) has been appointed as the new Head of Solutions, both of whom will report to Fidelity Life’s Chief Sales and Service Officer Bronwyn Kirwan.  Kylie Oldham (right) has been appointed as Senior Group Insurance Business Manager, and will report to Fidelity Life’s Head of Group Insurance, Anita Los’e. 

David’s role will be leading the design and delivery of Fidelity Life’s channel strategy, delivering sustainable growth across its advisers and strategic alliance partners.

Michelle will be accountable for Fidelity Life’s adviser channel solutions, professional development programmes and their in-house adviser team.

Kylie will be responsible for developing Fidelity Life’s group insurance portfolio and expanding its market presence with new propositions, technology, sustainable pricing and commercial terms.

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Financial Advice New Zealand release ‘Value of Financial Planning Consumer Research 2023’ report

Financial Advice New Zealand’s latest study on the value of financial planning has been released. The study was undertaken in February 2023 and questioned 1,001 New Zealanders over 25 years old who earned over $90,000 per annum or held over $50,000 of investable assets on the value of working with a financial planner.

Some highlights from the report include:

·         68% of clients of financial planners are highly satisfied with their wealth versus 33% of unadvised consumers.

·         9 in 10 of those who have seen a certified financial planner feel financially secure.

·         9 in 10 clients of certified financial planner say the benefits of financial planning outweigh the costs.

·         Those who haven’t engaged with a financial planner report unmet financial needs, with 2 in 5 worried about enough money to live on, 1 in 3 worried about the ability to live their desired lifestyle and 1 in 3 not having a realistic plan for a comfortable retirement.

·         99% of those who have engaged a certified financial planner trust they are acting in the client’s best interest

·         100% of those who have engaged a certified financial planner are likely to continue the relationship with their financial planner.

·         Clients reported the top benefits of working with a financial planner as better financial decision-making confidence; having simplify and explain financial matters; improved financial wellbeing and peace of mind; improved confidence in ability to achieve desired standard of living.

The report also has some interesting information on the different ways different generations like to engage with financial planners.

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