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[The Wrap] Partners Life drops a bombshell

I was going to say it's been a quiet week in the world of financial advice in New Zealand, then Partners Life drops this bombshell.

Friday, October 19th 2018, 4:45PM 1 Comment

by Philip Macalister

I never saw this coming. Partners Life has written to advisers and said this year's offshore conference will be its last. Partners has, arguably been the biggest player in the offshore trips market, spending, we reckon millions of dollars on taking advisers away.

There is clearly value for the company, and dare I suggest, advisers in these trips. For the companies it helps generate loyalty and sales. If it didn't they wouldn't do them.

Partners' decision has been driven by a number of factors including the bad press life companies get around their offshore trips.

Managing director Naomi Ballantyne says, in an email to advisers: "We have also heard repeatedly, and increasingly more assertively, from our regulators that soft dollar incentives such as offshore conferences for advisers are causing reputational damage to the New Zealand financial services industry.

"While they understand there is value created for both the adviser and the insurer from these conferences, they are not convinced that consumers benefit sufficiently to offset the potential for incentive driven conflicts to negatively influence the advice consumers receive."

On the commission front it was interesting to read this piece: Consumers don't care how advisers are paid.

Here come the robots

One of the themes this week has been around roboadvice with both Nikko AM and Kiwi Wealth on the cusp of rolling out the first versions of their robo KiwiSaver offering.

It's going to be very interesting to see the approaches each manager takes here. My guess is they will have different approaches.

The Nikko offering will be highly interesting as this is its first push into the retail market. 

And there is a third offering coming too....see Good Returns on Tuesday.

Markets continue to spook many people at the moment. For a good summation of where things are at and how investors and advisers should be thinking about things I highly recommend you watch this GRTV interview with Milford Asset Management executive director Brian Gaynor.

Besides giving his take on markets, we also ask him about how an active manager like Milford uses passive investment options. It's interesting as it helps put to bed this silly binary active v passive debate which has been raging for ages. 

Talking of GRTV we have two very special shows for you. They are from the Financial Advice NZ conference in Rotorua. When you have a bit of time pull up a chair and have a watch. You will hear from keynote speakers like the impressive Don Connerlly and Michael Harrison. Plus we have two of the Excellence in Advice award winners and plenty of other interesting interviews.

Watch the first video here

New Zealand's mini Royal Commission inquiry looks to be coming to a conclusion. The FMA and RBNZ are soon to release their review of banks. They are fortunate that the Royal Commission in Australia opened the door for them to get inside banks and other financial organisations on this side of the Tasman.

Of most interest in the FMA setting the scene this week and saying that it won't be naming and shaming any of the New Zealand banks. The fact that it has made this comment at this point indicates that the regulator is trying to front foot any criticisms that is being soft on the big end of town.

Have a great long weekend.

Tags: FMA

« FMA lodges robo application number threeSupport for pension move »

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Comments from our readers

On 22 October 2018 at 11:52 am AndyB said:
Partners Life cancelling offshore conferences. I wonder how many advisers disclosed to their clients the holid... oh conference.... when recommending Partners Life.

I don't doubt there was some merit in the conferences themselves... but akin to the regulators thinking, this is clearly an incentive and should be disclosed to clients.

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