Life industry grapples with Level 5 stragglers

The life insurance industry is grappling with stragglers who failed to meet the mid-March deadline for achieving Level 5 of the New Zealand Certificate in Financial Services,

Tuesday, May 30th 2023, 8:16AM

Fidelity Life acting chief executive Ian Clancy says it hasn't yet received confirmation from about 5%, or 90 out of about 1,800 advisers.

AIA NZ's chief partnership distribution officer Sharron Botica told Good Returns that it has seen fewer than 100 advisers leave the industry since March 17 while Partners Life managing director Naomi Ballantyne said 30 of her company's about 2,500 advisers failed to qualify.

“Some have gone on to finish – they were right at the end of the process. With the balance, we're working really hard with.”

Those who can't or won't achieve Level 5 will need to sell their business, Ballantyne said.

Some of those are people who planned to retire in any case.

“We're very confident if they don't have their qualification by the time they need to, we will have ensured their client base was in the right set of hands.”

Clancy said one of the education providers, Strategi, had told him it had seen “a huge rump of people” sign up to gain the required qualification ahead of the deadline.

Fidelity has asked all its FAPs (financial advice providers) to complete an attestation for all their advisers and has decided that it will stop dealing with any advisers it hasn't received confirmation from by June 15.

“Trust in advisers is fundamental to goo customer outcomes.”

Some of those it is still waiting for are one-man-band operators but others sit within FAPs, Clancy said. He cautioned that there is likely to be considerable overlap in that the numbers various companies are reporting will be the same advisers.

Botica said all AIA NZ's advisers and those of sister-brand AdviceQual have completed Level 5.

“No AIA Thrive Limited or AdviceQual advisers left the industry due to the competency requirements in the Code of Professional Conduct for financial advice services,” she said.

AIA will shortly be collecting evidence from advisers of their Level 5 qualification “as they move through their annual product learning reaccreditation process with AIA NZ,” she said.

“Ïf and where we become aware of any financial adviser or FAP providing advice or distributing AIA NZ products without meeting the competency requirements in the code, AIA NZ will suspend their agency.”

Botica said AIA saw “a significant amount of movement” during the two-year transitional licensing period. “We saw changes to around 1,200 agencies during 2021-2022 that we believe are attributable to the new regime, including requests for portfolios to be transferred to another FAP or agencies being closed. We have seen very few advisers – less than 100 – leave the financial advice sector since March 17.”

Strategi says the latest somebody wanting to obtain Level 5 would have needed to enrol was September last year, but only 22%, or 249 out of 1,098 enrolments since Sept 1, had completed the qualification by late April.
Of the 1,098 enrolees, 409 hadn't submitted any assignment.

Strategi says these results “radically depart from our normal expectations” and that it usually has very high completion rates.

Tags: Fidelity Life