[Weekly wrap] Educators in the news

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This week saw a couple of financial stories involving education; one was about the downfall of an educator for advisers and the other was about the lack of education for those supposed to be teaching financial literacy.

Friday, June 22nd 2012, 9:24AM 1 Comment

by Niko Kloeten

This week saw a couple of financial stories involving education; one was about the downfall of an educator for advisers and the other was about the lack of education for those supposed to be teaching financial literacy.

In the first story, Adviserlink has blamed government regulatory changes for its collapse into liquidation.  The company says it planned for there to be 7000 authorised financial advisers but there ended up being (so far) only 2000.

The story attracted some interesting comments and little sympathy for Adviserlink, with several comments negative about the service Adviserlink offered.  And as one comment noted, there is more competition in the adviser education market these days as a result of the regulation. 

The other story involving education was around financial literacy tutors, with new research  finding only about half of these tutors had received training or professional development.

And what training they had received, the research found, was not always linked to financial literacy.  This is an important finding as these tutors should be an important part of the national effort to improve financial literacy, along with financial advisers.  If these tutors don't actually know the subject themselves it is hard to see how they can really provide much of a benefit.

Also this week, the Institute of Financial Advisers called for the role of advice not to be forgotten in the debate about retirement savings.  The Financial Services Council has suggested changes to KiwiSaver that would have members contribute 10% of their income to the scheme, saying the current minimum contribution levels aren't enough.

But, as pointed out by IFA president Nigel Tate, on its own saving more won't solve the problem.  There are a number of other issues to consider such as asset allocation and the management of the drawing down process once people choose to retire.  This is going to become even more important as the population ages, because the margin for error is much smaller when people live for 30-40 years in retirement than when they only live 10-15 years after retiring.

Also this week, Tower has made some changes to its management team in a reshuffle that has seen two senior staff depart.

In insurance news, an expert has some advice for advisers concerned over the issue of replacement services: make the scope of your services clear from the start.  He says advisers make their own regulation in this regard, as they set the standards that clients (and the regulator) will hold them to.

Another insurance story was about Accuro and its campaign to market its SmartCare+ cover to advisers, with the non-Pharmac cover a big part of the promotion.  This shows the importance of listening to advisers, who are the ears to the ground when it comes to what end users want in products.

Niko Kloeten can be contacted at niko@goodreturns.co.nz

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