@MrT – I pity the fool that tables a discussion on adviser commission. Putting the commission issue to one side, there is another inflationary pressure caused by distribution via a network of adviser intermediaries. Those who were around when Partners Life launched will recall that Partners didn’t just dangle the highest commissions and best trips, they also offered products with (usually) the best wordings. FMA reports and guidance on replacement business over the years make it clear they like to see independent research on file when they encounter replacement business. Use of external/independent research can evidence that an adviser is giving priority to a client’s interests when replacing lower-rated cover (or choosing between providers to place new cover). Over time insurers have responded to FMA expectations by removing “soft dollar” and then volume-based incentives. With upfront commissions fairly consistent across providers, insurers have been forced to compete for the new business dollar in the ratings houses. The ratings war replaced the commission war (some time ago). But surely this is great for consumers? Take trauma cover - while an adviser can’t know in advance what a given client’s trauma claim might be for, surely better wordings = better outcome at claim time (all other things being equal)? The safest thing (for client and adviser) is to recommend the best cover, or at least better than what they already have (if replacing). The ratings war has seen trauma benefits evolve to cover more conditions (with full and partial payments), feature definitions that expand the contract boundaries for some conditions, and allow continuous/immediate reinstatement options. But these improvements aren’t free: better wordings = more claims paid = inflationary pressure on premiums. I don’t think insurers can put the policy-wording genie back in the bottle by bringing a full suite of “lower tier” affordable products to market. Having conditioned the intermediated distribution channel to sell based on wordings, insurers have collectively backed themselves into a corner. And a separate second-tier offering sold via internal distribution would likely create a new generation of “bank product” to be replaced by the intermediated channel. One option is to try and unwind some of the damage, as Partners Life is doing. Close the flagship plan, unbundle those wordings, and offer on a new plan promising affordability through modularity. Allow existing flagship plan members to transfer and hope that by the time clients have jettisoned enough modules for the remaining cover to be “lower tier”, age and/or health prevent easy replacement. And hope advisers stay loyal. This move won’t lower the barriers to entry, as the affordability measures are designed to retain existing PPP members, and retain JP members at some point in the future. Don’t get me wrong, I think the changes are a very good move, but something radically different is needed to solve the “access to advice” problem, when it comes to life and disability insurances at least. Implementation, not advice, is the challenge. After all, the advice is “free”. In 2011 Massey delivered a report demonstrating an underinsurance problem. If the same study was run today, I expect it would show that the products and distribution methods that have dominated the last 15 years have had little (if any) measurable impact.

way, WAAAAAY too late to be talking about unintended consequences. Way too late. Failed to articulate the problem regulation was meant to solve. (Stress testing the policy settings shaping our profession? LOL) Failed to listen to us in the "consultation" phase. (It is still far too hard for Kiwis to access the advice we know they need) Failed to differentiate Sales from Advice. (The code is far too easy for VIOs and those weird "property investment" outfits to use and abuse in the continuation of their business as usual) Come to think of it, what value can NZ get from APAC? Countries all made their choices. Asian countries generally chose access to advice, allowing tied agents and VI. NZ and Australia chose crushing regulation in pursuit of professionalism. South Africa chose a mix. China chose control. The USA chose “freedom”, or something (bribery and corruption).

Brian Coogan, "there I've made some rules now pay me" says it all, aka "job creation". If advisers do something like this, that's call "churning".

If by 'review' you mean more regulation, it's not the answer. Adding layers of clunk to the process only deters client engagement. Clients have zero interest in anything that's not about getting the job done. They don't care about what words you use to describe how we have their interests at heart, they expect it, they just want results and yesterday is good. There seems an industry has evolved around placing hurdles in the way of good business and like AML it only adds complexity while those it's intended to capture step around it, but I guess they can say "there I've made some rules now pay me" while everyone else suffers working through the layers of dross. Paperwork / regulation only adds cost, clients just want results and no amount of verbiage will improve pathways to that end. We're all about best practise, good client outcomes and getting the job done that's fit for purpose, it's why we exist, and we earn a commission for it and so we should and yes, good record keeping is important not just for future client engagement but also to protect ourselves ... got it! So if anyone from the industry is reading this, take note, after years of engagement with clients and advisers alike and conversations held across the board I can report no one is interested in more pointless regulation in fact if you could pare it back to a bare minimum would be great, the industry and clients will thank you for it.

keeping it straight & simple seems to be the hardest thing to do. making it complex & confusing looks like the trend.