Bailey said the 'Electronic Advice Process' (EAP) module, which Tower released last week, provided written proof that insurance advisers had met the standards of “due care, diligence and skill” when dealing with their clients.

He said the system also provided strong evidence of “proof of process”, which is a crucial component in some of the competency standards contained in the New Zealand Certificate in Financial Services (Level Five).

Bailey, who helped develop some of the level five standards, said the EAP system could show that insurance advisers had met two of the standards expected to be a minimum requirement under the new regulations.

The standards (25650 and 25651) require that advisers:

• Demonstrate the steps in the financial advice process relating to client relationships and gathering information, and;
• Demonstrate the steps in the financial advice process relating to the development and presentation of recommendations.

EAP is part of Tower's Optimus system and is available free to advisers who have passed the firm's training and accreditation process and “expectation of business to Tower”. Bailey said while the EAP program is tailored for those who support Tower – including automatic generation of Tower product premiums in the EAP reports – the system allows advisers to include whatever products they wish.

He said format of the EAP reports are “almost identical to that recently developed by the Australian FPA and endorsed by ASIC in response to the unwieldy and long, complicated reports being developed by Australian advisers”.

Bailey said the next phase of Tower's software development would include an automated insurance underwriting system.