by Niko Kloeten
This week saw a mixed reaction to Aon's unique KiwiSaver distribution methods, as well as a surprising reaction to a new online income protection product.
Good Returns revealed Aon provides Registered Financial Advisers with a disclaimer for clients to sign confirming they weren't given "personalised" advice on Aon's KiwiSaver scheme. Aon said the reaction from RFAs had been positive as they liked being able to provide information on KiwiSaver to clients without giving advice.
The story was the most commented on the site this week, with a wide variety of reactions. Some comments were critical of Aon's methods while others were supportive; one comment even suggested KiwiSaver doesn't belong in category one.
The Financial Markets Authority says there is nothing legally wrong with Aon's disclaimer, although it won't offer RFAs any protection if they do cross the line into personalised advice. The FMA is about to release draft guidance on KiwiSaver distribution which will address how far RFAs can go when discussing KiwiSaver with clients before information turns into advice.
Another story that has garnered a strong response has been that of Cigna offering New Zealand's first online income protection insurance.
In a follow-up this week we both support and criticism for the move from unlikely sources. Former Life Brokers Association president Ron Flood supported it, while online life insurance provider Des Morgan criticised it, saying income protection is too complex to be done online.
One thing companies don't have to worry about with online insurance is commission fraud, which has hit Sovereign hard over the past couple of years.
At this week's Sovnet conference chief distribution officer David Haak revealed there had been three frauds adding up to $1 million during that time. Chief executive Charles Anderson said it was a problem faced by the whole industry.
Anderson also said there had been fewer advisers exiting the industry than expected, and pointed to the relatively low requirements for RFAs as a possible reason.
For those who have gone the extra mile and become authorised financial advisers, there was good news this week with a big drop in their proposed annual levy looking likely. However, QFEs are unlikely to be happy as they look to be copping a big increase in costs from the original proposal.
In mortgage news, Mortgage Link chief executive Rod Templeton is leaving the company and won't be replaced. He said he was "buggered" after a challenging time including the Christchurch earthquakes, and said his departure was a mutual decision.
And finally, there was more bad news for embattled financial services business NZF Group this week. First it said it would probably have to convert $18 million of capital notes to equity, swamping its existing shareholders, and then it was revealed Peter Huljich has been selling down his stake in the company.
Niko Kloeten can be contacted at niko@goodreturns.co.nz
| « Sovereign hit hard by commission fraud | Managers warn against more KiwiSaver regulation » |
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