Insurance dealer groups should become responsible entities and take responsibility for their members’ operations, Kepa chief executive Jeff Page says.
He says dealer groups like Kepa should be made to become qualified financial entities (QFEs).
“We would be responsible for the actions and advice of our members,” he said.
Page says he has had discussions with the FMA about this idea and it was receptitive.
While there is nothing stopping a group being a QFE at the moment, there was little point in going down this track if another groups weren’t QFEs he said.
A key advantage of being a deler group is that Kepa’s members would be giving independent financial advice to customers as opposed to the current crop of QFEs who are essentially just selling their own product to customers.
“We would be totally and untterly responsible for the people we put into our business,” Page said.

Kepa is working on developing a corporate model for its members. There are 15-20 firms in the group that are interested in moving to such a model .
Page says it wouldn’t be mandatory for members to go down this route.
He said with all the change in the market the time was right to be developing a corporate model.
The two key things which member firms are looking for are “dollars for growth” and “succession and progression”, he says.
With the former adviser firms wanted to get access to capital which would allow them to do more marketing, improve systems and buy books of business.
Other firms were looking at corporatisation to grow their businesses while others looked at it for succession planning reasons.
Page says at the moment an insurance advisory business in New Zealand sells for around four times renewal income however in Australia the multiple is more like two-times.
He says that adviser firms which are corporatised are worth more than businesses which are not in that model.