FSC members want to see advisers' value highlighted

Insurers are hoping the Financial Services Council will take on a strong advocacy role for advisers as its new chief executive takes control.

Thursday, November 3rd 2016, 6:00AM

by Susan Edmunds

The FSC announced last week that former Sovereign distribution boss Richard Klipin is to take over as chief executive.

The organisation has been working through a period of turmoil since former chief executive Peter Neilson stood down.

There were a number of resignations from the organisation after it released a report from Melville Jessup Weaver that was critical of insurance adviser commissions.
Ed Eadie, former acting chief executive of Fidelity Life, and the company’s chief financial officer, said he hoped that the FSC under Klipin would focus on the value advisers brought to New Zealanders, and to promote the importance of quality financial advice.

He said that was even more important given the intense regulatory activity happening.

AIA chief executive Natalie Cameron said she too wanted to see the FSC throw its weight behind adviser-distributed insurance, and drive a sustainable industry that supported participants both big and small.

“This must include advocacy for advisers, who provide quality advice to the significantly underinsured New Zealand population.”

Partners Life managing director Naomi Ballantyne said she had still not been convinced to return to the FSC fold.

“We had continued to work actively as a member of the FSC post our resignation earlier this year.

“The FSC was doing extensive consultation and thinking about what the future of the FSC needed to be in light of the resignations that had occurred prior to and subsequent to the MJW report controversy. Partners Life was prepared to reconsider our resignation once we could get comfort that the newly shaped FSC would work effectively on behalf of the entire life insurance industry and not ever again be allowed to subvert into actively working against one group of member companies in favour of another,” she said.

But Ballantyne said before the FSC had fully decided what it was going to be and how it was going to do it, her firm was given an ultimatum.

“As a result we have elected to stick with our resignation and are now no longer FSC members. We are still believe very strongly that there needs to be a robust, effective, industry body both representing and championing the life insurance industry, while at the same time holding the industry to account on behalf of consumers, and we certainly anticipate becoming a contributing member of such an industry body in the future.”

AMP and Sovereign declined to comment.

Tags: FSC