FSC suffers financial blow but integration on cards

Insurers giving up their memberships have hit the Financial Services Council in the pocket.

Thursday, December 7th 2017, 6:00AM

by Susan Edmunds

The latest annual report for the association shows the surplus for the year ended June 30, 2017 was $48,436 – down from $219,476 the year before.

Membership subscriptions were $845,125 in the year, from $1.121m in 2016.

In the 2016 year the FSC spent $200,000 on the contentious MJW report into insurance commissions.

This year, it spent $19,097 on work related to the review of the Financial Advisers Act, and $122,543 on its work developing its own code of conduct.

Independent chair Rob Flannagan said the drop in surplus was due to the flow-on effect from member resignations in the wake of the MJW report. AIA, Partners Life, Fidelity Life, Sovereign, AMP and Asteron all quit.

They have since rejoined. “The FSC is actively managing cash and bank deposits on a variety of terms and interest rates to meet the cashflow needs of the organisation," he said.

Membership fees had been reduced but would return to previous levels for the next financial year, he said, because of its clear direction and revived support from members under new chief executive Richard Klipin.

Flannagan said the FSC was working through its integration with Workplace Savings NZ. A full integration is expected in July.

“The Navigating Change conference in September 2017 is a showcase for how the two industry bodies are stronger together than apart. Further work, analysis and member engagement during 2017 will shape the final form of the integration,” he said.

“The past few years have been challenging for the FSC, however the changes we have made in the last 12 months mean that we continue to operate on a stable footing. More importantly, member engagement is continuously increasing as evidenced by the breadth and depth of FSC committee members. Member numbers are growing and we have had no resignations this year. In 2018, we will continue to look at ways to serve the broader financial services value chain and the interests of our members.”

Salaries and allowances rose to $280,384, from $250,691 in the year when Peter Neilson was chief executive. Flannagan commands $81,000.

Tags: AIA AMP Asteron Commission conduct Fidelity Life Financial Advisers Act FSC MJW Report Partners Life Sovereign workplace savings nz

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