Transcript PAA CRM Launch 2011 - Professional Advisers Association

Industry Developments for Advisers
An Independent Perspective
National Roadshow for PAA Members
29 August – 1 September 2011
Peter Leitch – Chairman
Steve Shearer
Geoff Peterson
Ian Webb
Don Stewart
Bruce Cortesi
Alan Fleet
Five factors affecting NZ Economy
4 positives out of 5
1. NZ repaying debt: saving more than spending = seeds of
sustainable recovery and re-investment
2. Recovering from GFC: Government’s ‘fiscal austerity’
policies = expenditure control but decreased taxes
3. Record food export prices offsetting high dollar
4. Christchurch earthquake: reconstruction 1.5% of GDP for
next 5 years (est.)
5. Global indebtedness barely controllable: Eastern creditor
nations v. Western debtor nations
2011: Key indicators – quick glance
Headline Inflation:
Unemployment
Current Account Deficit:
5.3% - highest 21 yrs, but
underlying is less
6.5% c.f OECD average of
9.2%
4.3% of GDP cf. 5.5% last
decade
Trade surplus
(Exports less imports) =
$129 million in July – first
July surplus for 20 years
NZ Population = 4.4
million.
In 2020, 1 million Kiwis
will be over 65
Wage growth:
3.5%
(lower than inflation)
NZ net borrower (and has been since 1973)
KiwiSaver asset growth positive
• From: $954.10 million in June 2008 (total funds)
• To: $8.53 billion June 2011
• 49% of members funds invested in conservative
funds, being 68% of total KiwiSaver Assets
• Most KiwiSavers risk-averse (and official messages
encourage this)
Source: Morningstar
Life Insurance Claim Payouts…
• 2009 = $900 million paid to policy holders
• 2010 = $972 million paid
• 2011 = $1.2 billion (provisional)
A good news story to tell!
Source: ISI, June 30
Opportunities & Threats facing Advisers
Underinsurance v.
welfare
dependency
Commissions
Adviser costs up;
turnover &
profitability down
Disclosure –
‘Independence’ –
RFA can use term;
AFA cannot
Adviser alignment
v. unaligned
RFA v. AFA
requirements
Industry structures
– QFEs, bank
ownership
Consumer
perceptions of
financial and
insurance advisers
Distribution of
financial products
online & direct
selling
NZ Residential Mortgage Book
Source: Reserve Bank
Industry statistics on advisers…
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7,200 RFAs (estimated) – RFAs & AFAs
1,771 AFAs now registered with FMA (August)
63 QFEs
Yet 4,000 RFAs registered with ETITO; & 3,000
passed standard set B on the Code
• Of the 1,771 AFAs, 1,100 did standard set C
(rest got qualifications relief)
PAA Membership: Percentage Trends under
Regulation to date (running total)
14
QFE
advisers
27
AFAs
RFAs
59
PAA Membership stable in changing times
• 875 (July 2011)
• Average age rising (late 40s) – PAA membership
reflects maturing baby-boomer demographic
• Retiring members matched by new applications each
month
• 300 holiday home users, and 500 in liability
programme
• $2.5 million+ asset-base (7 holiday homes)
Annual Member Declaration
– New Requirement
• The PAA asks that all members complete them
to assist us to back you up
• Extra check for the Association: we need our
membership to be squeaky-clean
• FMA has been in touch with us on member
compliance
• Takes a few minutes to fill it in
Business Replacement Form
• ISI BRA form never proceeded after last year’s saga
• The old ISI form can be used
• Message is the same: always encourage clients to
take advice if contemplating changing policies
• Act in the best interests of clients and regulation will
be your friend
Read your new Adviser Agreements
• Do you own your client base or does the provider?
• Does your provider request access to your client files?
• Do you have the right to choose a preferred AFA to service
your investment clients?
• What happens to your legacy book if you are not authorised
and you receive income from it?
• Are AFAs required to supply an ABS copy to the provider?
• Have you checked the 'buyer of last resort’ clauses, if selling
back to providers?
PAA CRM Coming Soon…
• Led by Chris Mills of Linx Software in Australia & Ian
Webb of PAA Board
• Complex project: software customised for NZ adviser
needs
• Achieved at minimal cost to PAA, but with powerful
benefits for members when released
• Independent platform from providers
PAA CRM features include…
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User-friendly
Purpose-built: insurance & mortgage advisers
Client building & commission-checking
Control & own your client data
Assists compliance and best practice
Regulation – Quick Update
• New FMA levy on all advisers; PAA lobbied: Government now
rethinking how to apply levy to a wider net
• FAA Audits on AFAs announced for September – FMA has
informed the PAA (lower North Island first)
• Anti-money laundering regulations now in effect (July):
– Includes all financial advisers in theory
– But in reality investment advisers who hold client funds more affected
– Financial advisers deemed a ‘medium to high risk’, but again, only if
you hold funds
– Compliance and reporting costs
Client Disputes Feedback
• Mainly insurance companies, not individuals
• The public know firms have a complaints process –
awareness of advisers is much lower
• Mainly lending related, especially second and third
tier lending
• If you ask: ‘What is that you want or expect?’ you will
solve many complaints before they escalate. And
remember, don’t commit to email straight away.
Key Takeaways
• The PAA wants to be able to provide a stable home for likeminded professionals to grow and develop within this everchanging and legislatively fickle environment.
• We remain principled, though prescription is getting stronger
from government
• We are your professional association partner here to assist
you through our independent voice and member advocacy.