Asteron and Fidelity stick with FSC - for now

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Asteron and Fidelity Life have both slammed the FSC report on life insurance saying that the authors Melville Jessup Weaver have done a poor job.

Friday, November 13th 2015, 12:10PM 3 Comments

"There is no question of my disappointment with the review in its present form," Asteron managing director Nadine Tereora says. "Quite simply, I’m not confident the end product is aligned with the scope of work defined by the FSC."

"Equally, I believe the tone of the report is not appropriate for this type of review. And I would also argue that the content of the report, its analysis, conclusions and recommendations are overly simplistic and create a misleading impression.

"In other words, rather than educating through impartial examination, my view is that this report places at risk the industry’s desire to bridge the underinsurance gap amongst New Zealand’s various communities."

She says Asteron Life is currently considering its membership of the FSC. "My primary concern is to ensure we remain in a position of influence with the regulators to best represent the interests of and support our adviser partners."

Tereora says Asteron actively support advisers wanting to transition to commission models that advocate customer service and care as well as providing greater choice when it comes to premium structuring.

"We’ve been rewarded for that focus by some of the best retention rates in the intermediated advice space."

"Now is the time for calm and reasoned leadership with a collective focus on shaping the outcomes we know will benefit New Zealanders."

Meanwhile Fidelity Life chief exective Milton Jennings agrees with other life companies that the "falls short of the agreed scope, which was intended to encourage investigation and review of advice conflicts within the industry, across various channels."

"The outcomes of the report were expected to aid the wider industry and government in legislating against detrimental advice conflicts, and ultimately help to protect consumers.  Instead, in our view the report appears to present a clear bias against the independent adviser channel and commissions paid within this sector."

"Fidelity Life has always been a vocal advocate for advisers and the advice process," Jennings says. Fidelity doesn't support the MJW report findings and wants more work done on it, however the company won't resign from the Council.

"We see value in having an industry body that can work together on issues and remain committed to staying around the table to try to continue to advocate for independent advisers."

"In the meantime Fidelity Life will continue to work with the wider industry to positively support any reforms which ultimately ensure the very best outcome and advice for customers."

AMP has chosen not to comment on the report until it is released. 

Good Returns understands the report was given to officals today and is due for release in November 23.

Tags: Asteron Fidelity Life FSC Milton Jennings MJW Report

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