Life advisers reminded they need to actively review legacy policies

Compliance Refinery director Steve Burgess has reminded life insurance advisers they need to review legacy policies or risk opening themselves up to censure by the Financial Markets Authority (FMA).

Speaking at a Quotemonster roadshow event in Lower Hutt, Burgess said of legacy products,

“If you don't look at it, the regulator could decide that's you saying that product is suitable for your client.”

Burgess also cautioned that some legacy products have features that are difficult or impossible to replicate with new policies, so as well as listing the advantages of replacement policies, advisers need to be recording any disadvantages clients may face if they change.

Steve Wright has also written of how the FMA have flagged ‘suitability of advice’ as something they will be focusing on in future. Wright has helpfully listed some steps advisers should be following to help ensure the suitability of their advice, including having a suitable fact find process; needs analysis and quantification of client risks; avoiding limiting or transferring risks to an insurer; assessment of insurance types required and sums insured; and giving appropriate product recommendations.

More news:

Financial Advice NZ's webinar on the Code of Professional Conduct is on 28 August

ASB's net profit after tax down 10% from previous year

Travis Hamilton named the New Zealand country Chair for the Million Dollar Round Table organisation

Patients across the country concerned at GP fee increases; GP’s say capitation funding insufficient

Most KiwiSaver providers have now submitted their KiwiSaver climate reports

Blog birthday!

Another year has passed us by and its the anniversary of this blog. But it is not just any anniversary - the blog is 20 years old today. This time has passed in a flash. During that time we have learned a lot and we want to share some of that with you who may be considering this particular form of engagement with your clients, colleagues, and friends.

First, writing helps me be a better analyst of the sector. Personally, I have always liked to write. I started to do this as a way of organising my thoughts, as a way of providing rigour to argument, get those reviewed by other people, and to help understand both the strengths and weaknesses of one’s own analysis. These are vital for one to see through 'common beliefs’ and ‘stories that we tell’ and come closer to understanding the truth about our subjects. A good explanation of why writing works is at this link: https://paulgraham.com/words.html I encourage you to write more.

Second, this has been a great mechanism for finding other people who care about our industry, are prepared to engage with me, and therefore, this has been possibly the single best form of marketing for us. It may be more suited to our kind of business than yours. But if you are an adviser working on more technical areas or trying to engage with clients that will be demanding in terms of details and overall quality of fulfillment, then you too, may find that a blog could be a valuable component in your marketing planning. I encourage you to engage in some ‘long-form’ marketing. It’s a great way to get found.

Thirdly, our clients have found the resource so useful that it drove further innovations: we now run a news database, which includes all the blog content here, and this fulfills a lot of other content requirements - helping us to keep an eye on events for company reports, and to spot changes that feed in to quarterly life and health reports, and adviser business remuneration reviews. I encourage you to think ‘create once, use in many platforms’ connections between one thing and another are so useful. Fran jokes ‘not another database’ and yet - spotting relationships between events and data, and other data, has been so central to our success both at Quality Product Research and in consulting that it could also be a guide. So I encourage you to build databases.

I always write this, too, on our anniversaries: if you are thinking you would like to write about the sector, and you don’t want to set up your own blog because of the commitment, you could become a guest commentator here. Please send me a draft article and I will look at it and give you a call to discuss if we can use it. I would be delighted to help you experiment with this process.

Lastly, I could not do this without other contributors. Fortunately in my team I have several people who help a lot with this process. Kelly O is the content creator for the regular news pieces these days, as I must work on other things. She also helps to proof many of my pieces. Ed Foster, our data scientist writes many great pieces - but usually for quarterly life and health reports. Along with Fran and Doreen who also provide content from time to time here. In addition I am grateful for proofers these days: Kelly P and Aneel Ravji who are very good at checking and challenging me on what we publish. Friends in the industry who help are too numerous to mention them all but Jeremy Bernstein has an eagle eye and a real passion for the sector, and so is one of our best at giving feedback. There are many others and I am deeply in your debt if you have written me an email to give a point of view or perspective - or to tell me I’m wrong - these are really valuable to have when writing.

What advisers think of KiwiSaver

At our latest roadshows, we’ve been lucky enough to have Generate KiwiSaver Scheme join us, giving advisers insights into the benefits of offering KiwiSaver advice. We’ve also been finding out what our roadshow attendees think about KiwiSaver.

To date, the results show that for those advisers who are already offering advice on KiwiSaver investments, the top reasons for offering KiwiSaver are diversifying revenue, building a KiwiSaver book for long term value and adding value to clients. Advisers have told us that performance, ease of withdrawals and alternative fund options are most important to clients when choosing a KiwiSaver provider. And 27% of advisers were interested in additional resources or support related to KiwiSaver advice and independent research.

If you haven’t joined us already, come along to one of our remaining roadshows to find out more – along with info on KiwiSaver we’ll be highlighting some major new research, talking about two new regtech tools to help keep you safe, giving you a sneak peek at Kiwimonster, and much, much more.

• 20 August -Queenstown

• 21 August - Dunedin

• 22 August - South Auckland

• 27 August - Whangarei

• 28 August - North Auckland

• 29 August - Nelson  

More news:

Fidelity Life extend 3 months free until 31 December 2024

Michael Weston talks about key priorities at Partners Life

Jon-Paul Hale highlights the good advisers do

Asteron Life are looking for a Lump Sum Claims Specialist

Study finds three-quarters of respondents have realised the importance of financial knowledge

FAMNZ launch inaugural Adviser Elevate series on 28 August

AIA sponsor the Parliamentary Rugby Team

Charlene Overell is the Financial Advice New Zealand Volunteer of the Year

Fidelity Life extend 3 months free until 31 December 2024

Fidelity Life has extended their 3 months premium free offer until 31 December. All new customers who take out an eligible policy will have their premiums covered for the first 3 months.

The offer is available to eligible new Platinum Plus, Platinum Plus Level Term, Mortgage Protectors and NZHL Life policies that are illustrated between 1-May and 31-December 2024, submitted within 30 days of the illustration being generated and issued within 6 months of the offer period end date.

More news:

mySolutions webinar 'Introduction to Milford Asset Management' 21 August

The IFSO Scheme investigated 479 complaints in the past year

Financial Advice NZ 'Professional Ethics Workshop' is on 22 August

Financial Advice NZ's 'Strategies Summit 2024' is on 21-22 August

FinTech webinar 'Exploring the Australian fintech landscape' 19 August

KiwiSaver assets rose $3.5 billion to $110.8b at the end of the June quarter

Huge increase in the amount of chemotherapy being provided by the private sector in recent years

John MacDonald suggests compulsory health insurance is the answer to Health NZ’s overspend woes

Boris Sokratov believes his health insurance’s early access to services is the reason he’s still alive

Product Rating Map

Our product rating map is an easy-to-use resource, available to Researchmonster and Advicemonster subscribers, which displays the different companies we research and the product selections you need to make to successfully compare. Find out more here

nib launches an AI-driven symptom checker

nib has launched an AI-driven symptom checker, to help direct kiwis to the appropriate treatment, based on their needs. The symptom checker is available to all nib health policyholders through the my nib app.

Users input their symptoms and the symptom checker gives information on possible conditions as well as when and where to seek care. For a limited time, users advised to book a telehealth GP appointment will be able to get an appointment with Tend’s nationwide online GP service, at no additional cost.

nib New Zealand Chief Executive Officer, Rob Hennin, said

“It’s part of nib’s mission to help Kiwis take a more proactive approach to their health and wellbeing no matter where they are… AI-powered health tools, such as symptom-checkers, can help keep non-urgent medical cases out of hospital emergency departments, relieving some of the pressure on hospitals and emergency department staff, and help ensure people get the right level of medical attention.”

The symptom checker platform was developed by Infermedica and has been used in more than 30 countries, reaching more than 17 million users internationally.

More news:

The ANZIIF Group Life Seminar is on 3 September in Sydney

Level 5 certificate to remain the minimum requirement for advisers

INFINZ seek feedback on 'Shifting the Dial on Diversity' report

New Zealand’s unemployment rate rises to 4.6% in the June quarter

Should more employers be looking at offering more flexible working options?

Increasingly, organisations are seeing the benefits of offering more flexible working options, in terms of productivity output, being able to attract a more diverse range of employees and employee satisfaction.

Stats NZ data shows that in 2023, 81% of organisations offered flexible working hours, up from 57% of organisations in 2018. In 2023, 77% of organisations offered part-time work roles, up from 53% in 2018.

Kiwibank economist, Sabrina Delgado, highlighted flexible work’s impact on the wider economy,

“Whether it’s working around school hours or the location of work, greater work flexibility perhaps has the biggest economic impact on improving the labour market outcomes and productivity.”

Infometrics chief executive and principal economist Brad Olsen said,

“Increasing participation even further can be supported by removing barriers to work for different groups, like parents, while still allowing them to do their parental duties without as much compromise as before.”

Dr Ellen Ford, the creator of #workschoolhours movement, said,

“There are a huge amount of parents who would absolutely love to work in an organisation that provides a school hours framework and they would add immense value to the organisation.”

“One of the economic benefits is that it actually allows organisations to tap into a massively underutilised section of the workforce.”

“If businesses are struggling to attract and retain great talent, one of the ways they can do that is actually offer roles that work within school hours.”

“People on part time contracts are typically the most productive in the workforce. They just get their stuff done in a shorter amount of time.”

It seems like flexible work options are here to stay. An international survey of more than 500 CEO’s around hybrid working, found 91% had adopted hybrid working and 74% said a full-time office return is not a business priority. 73% of CEO’s agreed that hybrid work allows them to attract the best workers and 76% saw improved staff retention since offering flexibility to employees.

More news:

Tony Vidler posits why advisers face fee resistance and how to turn it around

Finalists for the FSC Awards 2024 announced

KiwiSaver investors advised to ignore sharemarket turmoil and stay the course

All the claims data is shouting a message we do not want to hear

Two claims data releases by (AIA and Partners Life) shout out strongly the large causes of claims: these are driven mainly by non-communicable disorders. That’s cancer, respiratory illness, heart disease, diabetes, and mental health problems. Although many claims, especially in income protection, are initially caused by accidents - they are still a minority. Although many claims causes are much more widely reported - murder, suicide, motor vehicle accidents, terrorism - it is the non-communicable diseases that steal decades of life from our family and friends. Although it is understandable, perhaps, to believe that sudden external and violent means of death are more preventable, the truth is the reverse. In terms of personal agency, the extent to which choices you make can influence the outcome, people have more power to reduce risks by working on the causes of these big non-communicable disorders than almost any other health intervention. It’s also relatively low cost to make these changes. It is not easy, but good things rarely are.

AIA published back in 2021 the excellent “5590+” report which highlights how five ‘modifiable behavioural factors’ lead to five non-communicable diseases, that account for 90%+ of the deaths in New Zealand. It is worth a read: 5590+, the numbers that will help you lead a healthier, longer, better life (aia.co.nz)

That this is not an easy read is clear. Most people do not want to be told that diet and exercise are the answers. They would rather a pill or procedure. It is also important to acknowledge how hard it is to move against trends that are in the majority in society. In the 1970s it was possible to eat the way most people do today, but it was difficult, so most people were slimmer. The reverse is now true. That the odds are stacked against you is unarguable: modern processed food, takeaways, and restaurant meals are almost designed to work against you. It is hard to force yourself to eat well, and easy to eat badly.

That much of the media are happy to highlight the scary, and very rare, makes it hard to turn towards the daily and the commonplace with fresh eyes and face them down. Some social media scaremongers are trying to worry you about sideshows, it remains necessary to stay focused. That means improving what we do every day in terms of food, drink, movement, and attention. It is not just you it is also a challenge to me. Weighing in at 1.5 kilos more than I was on Jan 1st, I have to keep my eyes on the prize and get back to smaller portions, more greens, getting out into nature, and pushing a bit more tin at the gym.

AIA celebrate 5 years of AIA Vitality

AIA have released some statistics about AIA Vitality to celebrate five years of AIA Vitality being in the market.

• To date, over 60,000 people have joined AIA Vitality.

• On average, an AIA Vitality member in New Zealand completes a health and wellbeing assessment available in the app every 15 minutes.

• AIA Vitality members have completed over 18,500 free Vitality Health Checks.

• Since becoming AIA Vitality members:

  • 79% have moved to a healthy glucose range from an unhealthy glucose range.

  • 64% have moved to a healthy cholesterol level from an unhealthy level.

  • 49% have moved to a healthy blood pressure range from an unhealthy range.

• Less than 50% of New Zealanders meet the recommended guidelines of 2.5 hours of weekly physical activity but 95% of AIA Vitality Silver+ members meet this target.

• AIA Vitality members combined have walked the length of New Zealand 1,295 times.

• Members have achieved over 86,800 Status Reward vouchers and 976,500 Active Rewards vouchers – a combined worth of $9.1 million in rewards.

To celebrate the anniversary, AIA is giving customers who activate their AIA Vitality membership by 31 October the chance to win one of 20 Woolworths Gift Cards, each worth $500. Existing AIA Vitality members who hit their $5 weekly physical activity target anytime between 5 August and 1 September, go in the draw to win 1 of 5 Apple Store Gift Cards worth $729.

AIA have recently made some improvements to AIA Vitality, with a new AIA Vitality app with enhanced features and functionality being launched in April this year.

More news:

AIA offer clients a chance to win a year's insurance

The FSC runs a Money Month campaign on Money and You website

Partners Life and Banqer launch free financial literacy course

AIA appoint Bianca Bettini as new AIA Vitality Coach

Andrew Bayly says the CCCFA’s director and senior management liability provisions to stay

Westpac connect Volley to their Open Banking platform

Bell Gully put together an overview of the Customer Data Right bill and the CDR framework

Finance Minister says she wants external investors for outside capital for Kiwibank

GP’s having to raise fees after insufficient government funding increase

Legal and regulatory update for the life and health insurance sector

30 Jul 2024 - NZ Police Financial Intelligence Unit release “The CASH Report” for July 2024, which replaces "The Suspicious Activity Report”.  https://www.police.govt.nz/sites/default/files/publications/fiu-monthly-report-jul2024.pdf

31 Jul 2024 - The Reserve Bank of New Zealand has published two new Analytical Notes that investigate utilising new models and data sources to complement existing approaches to monitoring financial stability.
The first Analytical Note - Getting sentimental: Using news sentiment to measure financial stress in New Zealand, investigates using measures of news sentiment as early-warning indicators of financial stress in New Zealand. This Note introduces new indicators which measure economic news sentiment in New Zealand.
The second Analytical Note -Beyond the crystal ball: forecasting non-performing loans authored, investigates the relationship between non-performing loans and economic conditions to provide insights into the future health of New Zealand’s financial system. https://www.rbnz.govt.nz/hub/news/2024/07/reserve-bank-of-new-zealand-explores-new-techniques-to-enhance-financial-stability-monitoring

7 Aug 2024 - The FMA have released a public scam warning alerting New Zealanders to an increase in fake advertisements using images and deepfake videos of political figures.  https://www.fma.govt.nz/library/articles/deepfake-video-scam-warning-fake-news-stories-political-endorsements/

7 Aug 2024 - ASIC proposes to extend the operation of three legislative instruments for a further five years:

• Class Order [CO 14/923] Record-keeping obligations for Australian financial services licensees when giving personal advice,

• ASIC Corporations and Credit (Breach Reporting—Reportable Situations) Instrument 2021/716, and

• ASIC Credit (Breach Reporting—Prescribed Commonwealth Legislation) Instrument 2021/801.

ASIC has assessed that these instruments, which are due to expire in October 2024, are operating efficiently and effectively, and continue to form a necessary and useful part of the legislative framework.

https://asic.gov.au/about-asic/news-centre/news-items/asic-proposes-to-extend-the-operation-of-three-legislative-instruments/

7 Aug 2024 - The Council of Financial Regulators (CoFR) Insurance Forum has set a vision for New Zealand’s insurance sector. The vision is for an insurance sector that is forward-looking, fair, stable, competitive and efficient, promoting informed and confident participation by consumers and business. https://www.cofr.govt.nz/news-and-publications/financial-regulators-set-vision-for-new-zealand-insurance-sector.html