Industry ponders role of FSC

Financial services industry participants are undecided on whether there is a future role for the Financial Services Council, after the resignation of its chief executive.

Tuesday, February 16th 2016, 6:00AM 1 Comment

by Susan Edmunds

Peter Neilson’s decision to take redundancy from his position was made public yesterday. His last day with the FSC was Friday.

FSC chairman Rob Flannagan said: "The FSC Board is reviewing how the KiwiSaver and personal risk (life, income protection and credit insurance) industries will pursue their collective interests. While this is under way the FSC will not be needing a full-time CEO.”

It comes after AIA, Asteron Life, Partners Life, Fidelity Life, AMP and Sovereign tendered their resignations from the organisation.

Industry commentator David Whyte said Neilson had not been the cause of the FSC’s problems. “He’s a good guy. He’s been at the sharp edge of an organization going through a task that’s particularly difficult to navigate, in some ways it’s inevitable.”

Whyte is in negotiation to set up a new group to represent insurers using advisers, made up of Asteron Life, Partners Life, AIA and Fidelity.

He said changes at FSC would be part of the evolution of the industry.

“I would think there is every chance of getting the FSC back on track, ideally as a bigger, more unified industry body that represents amore cogent identity and profile. There’s a pretty strong chance. It’s not to say Peter was the cause of the dysfunction but there’s an opportunity there.”

Natalie Cameron, of AIA, also said there was hope for the FSC.

“I think Peter is excellent and just joined the FSC in a difficult time - the FSC’s issues pre-dated him.  The FSC had already lost - or was losing - members and Peter was up-front about the need for it to clarify its purpose.  I would be open to being part of an FSC that was able to actively represent all life businesses types, including those that support IFAs.”

But Naomi Ballantyne, of Partners Life, said any changes the FSC might make would not be enough. “It wasn’t Peter Neilson. He didn’t cause the issues. The issues would exist whoever was the spokesperson. I don’t think they can be addressed.”

She said the problems revolved around people wanting to use the organisation to compete for their own agendas rather than working together to increase the value and awareness of the industry.  “That’s been a problem for a long time.”

She said it was likely that there would end up with industry different bodies to represent each sector.

She said there were big differences between the companies working with advisers to offer consumers choice, and those that had aligned channels and direct sales. “To be independent you have to be paid commission. The MJW report had a focus on commission being bad and that is where the problems came.”

Tags: AIA David Whyte MJW Report Partners Life

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Comments from our readers

On 16 February 2016 at 8:42 am dcwhyte said:
Not quite correct - a separate industry body is not under "negotiation". An informal discussion was convened to consider various options following the resignations from the FSC of four life office members. The discussion covered a number of alternatives, but no specific conclusion was reached, and certainly there is no "new group to represent insurers using advisers" under negotiation.

Also, AMP and Sovereign resigned from the FSC some time before the more recent departures took place.

There are issues that the industry body needs to address, and it is possible that these may be resolved within the current structure.

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