by Benn Bathgate
FSC chief executive Peter Neilson said the FSC’s newly-formed Life Insurance and Advice Policy Committee would “address the viability of the adviser distribution chain for financial services.”
Neilson said the idea to examine the role of adviser distribution arose from FSC research on underinsurance.
“It looks as though we’ve got a potential market with much greater need that we’re currently providing for,” he said.
“In the past we’ve disproportionally relied on the broker distribution channel, and the question that arises is with things like income protection, why are we selling to less than 20% [of the population] rather than 50%?”
Neilson said at present, the adviser model worked well for selling to the top 10-15% of the community, but was failing to penetrate further.
“We’ve got to use all of the channels better than we have done previously, and [examine] how we can build on the broker channels,” he said.
“We have a very good business segment, touching quite closely to 20% of the population through the broker chain. How can we extend that on a cost effective basis and have more products being sold by brokers to more people.
“If we’re serious about going from a niche market to a much bigger market, what are we going to do?”
Another issue Neilson said the FSC committee would examine is how to encourage people with more diverse backgrounds into the advice space, and how to utilise the relationships advisers have with clients’ to discuss a wider range of needs.
He said the committee aimed to put together a discussion document which would be put to the adviser organisations “to have a wider conversation with the sector, agents, brokers and their organisations.”
The FSC Life Insurance and Advice Policy Committee members include Naomi Ballantyne (Partners Life), Milton Jennings (Fidelity Life), Damian Lawrence (Sovereign), David Carter and Nadine Tereora (Asteron Life), Therese Singleton and Anthony Merritt (AMP).
Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz
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In the 1950's we had around the 5th highest standard of living in the world.
Things such as income protection, for a majority of the population, is a luxury they don't have money available for.
Remember that the FSC is representing profit driven corporates. They are merely looking at new distribution for their products.
We need to address root cause problems rather than continuing to band aid, through legislating and committee decisions.