Advisers question whether churn still an issue

I think if the real figures about straight out "churn" were made available, it might make certain jobs questionable about if they are in fact need at all.

Goodness, Ghelani states, "potential churn". Someone claims insurers should be the gate keeper on advice. No one knows who wrote this article. I actually agree with Mark. Why are we imagining problems again? Why not deal with actual facts rather than imaginings. I would like to hear Chatterbox's theories on this as well... I would also love Mr Ghelani to do six months in the field as an adviser. If there is an actual problem, state it show us, talk to those who could be offending The DRS case studies and recent cases do not show or reflect the imagined adviser harm (insurance-personal) that the FMA hallucinated at the start although Chatterbox may suggest they were hidden by the illuminati.

"FMA expected that any situations where insurance policies were being replaced would include a thorough comparison of existing cover." - Ghelani Um, no. There are plenty of operators that are not doing comparisons, and hopefully, they are stating this. This is the FMA's own industry guidance previously published! “We are seeing, in a small number of cases, very reckless conduct for replacing policies. We will prioritise these cases, while most of what we receive are allegations, our internal risk assessment and evidence on hand usually determines our immediate next step.” - Ghelani Good! “With oversight from the insurers, there shouldn’t be anyone that feels they can do it or an insurer that allows it. The insurer should be acting as the gate keeper for inappropriate advice." - Tim Yeah, no. Insurers have no idea what the advice situation might be as to suitability and client need. Insurers demanding better justification of replacement would be a better approach. If the adviser can't justify it, then it shouldn't proceed. The problem is insurers' self-interest, with business flowing to them. “I believe the FMA should be coming down exceptionally hard on the small number of cases they are seeing as this is where the problem lies.” - Tim Agree!

To paraphrase Douglas Adams: In the beginning, the MJW report was commissioned. This has made a lot of people angry and been widely regarded as a bad move. The report (“Review of Retail Life Insurance Advice”, 2015) was commissioned and funded by the FSC and its insurance members, and the terms of reference were to “specifically address the cost of “churning” to the Public of New Zealand, the impact of high commissions and identify solutions including a transition path likely to have wide support amongst stakeholders”. The disclaimer to the report makes it clear that the report was an own goal: It did not fit the narrative the FSC members were hoping to craft. Being favourably cited in the Executive Summary of the FMA’s 2016 report on replacement business confirms it was, indeed, an own goal. The report contains several recommendations, and it is interesting to read it 10 years later and appreciate the extent to which those recommendations have gradually been implemented (primarily through FSLAB and COFI). One recommendation that has not yet been implemented is: Introduce an industry wide replacement policy process. The FMCA provides that regulations may be made to require “a thing to be done in a prescribed manner” in respect to a provision of the Act. There is room for prescriptivity in a principles-based regime, and standardising replacement business advice has got to be a win for consumers, advisers/FAPs, and the regulator. It might even be fair for insurers (when viewed as a group).