"Insurers have been actively out helping advisers think about their business models"
A lot of business and licensing preparation has been put on hold for advisers as the country throws its efforts into eradicating COVID-19 in New Zealand, and many expectations for 2020 have now been thrown out of the window.
Licensing was expected to be a huge focus for advisers this year, but with the deadline for the new regime pushed back to 2021, advisers are now redirecting their focus to keeping their businesses up and running.
Richard Klipin, chief executive of the FSC says that insurers, government and regulators have all been supportive of the adviser industry, and are doing all they can to give them some certainty through these strange times - and to alleviate the pressure of preparing for a new regime.
“2020 was really meant to be the year of change for financial services, and that’s now been put onto the burner for 2021,” Klipin said.
“There was regulatory pressure and lots of decisions for the sector to make, and that pressure has now been alleviated. But of course, when you’re in lockdown, it’s very hard to write new business.”
Klipin says insurers have been generally supportive of advisers, and have been helping them figure out how to structure their businesses during a time of low activity.
“The insurers across the sector have been actively out helping advisers think about their business models, think about client retention, and how they can help consumers come through this period of time,” Klipin explained.
“A lot of our members’ policies have hardship provisions in them - so for those who may have had a reduction in income or lost their jobs, they don’t have to necessarily cancel their cover. But managing your business - irrespective of whether you’re an adviser, a life insurer or a professional body in the face of a pandemic- is a very challenging exercise. The sector has been very mindful of that, and has been doing as much as possibly to try and support advisers through the process.”
When it comes to regulatory pressure, Klipin says both the government and regulators have been very engaged with the industry, and a lot of key legislative changes will be “rejoining the queue” once the threat of COVID has died down. While there are no solid dates for advisers to work towards, Klipin says the new deadline will likely be in autumn of next year.
“The FMA, MBIE, IRD, etc.- have all been immensely engaged with the industry to try and get the settings right,” he said.
“In terms of licensing date changes, there’s a working draft date of March-April next year. But there are a lot of unknowns at the moment, we don’t know how long it will take for New Zealand to eradicate COVID-19, so a lot of pending regulation that will jump back into the queue once there’s a bit more clarity on the table.”
