David Hunt, National Manager Licensee Select, welcomed Simon to the role and said the appointment came as the business continues to experience unprecedented growth.

“Simon will focus on working closely with our key stakeholders to support the continued growth of the Licensee Select business. At the same time, he will have responsibility for ensuring that the ongoing delivery of products and services to our clients is both efficient and effective.”

With more than 12 years’ financial services experience, Simon brings extensive skills in project and stakeholder management, and business process improvement. He also has broad experience in sales and distribution support.

Simon was most recently a senior member of the AdviserNETgain business within BT Financial Group and has previously held various roles with AMP Financial Planning and Asgard Wealth Solution

The post Licensee Select appoints new operations manager appeared first on AdviserVoice.

The post FPA calls on Minister Shorten to recognise financial planning profession under law appeared first on AdviserVoice.

Damien Mu, Chief Distribution and Marketing Officer at AIA Australia, said the enhancements have been developed in response to adviser research which reflects a desire for tangible customer benefits and time saving measures for advisers.

“Advisers have told us that they want life insurers to go beyond simply trying to maximise product research ratings and rather deliver differentiated benefits that provide genuine value to customers,” said Mr Mu.

“Through a broad range of services at no cost to our policyholders we believe our industry first WeCare service, is anticipated to be highly valued by AIA Australia Priority Protection policyholders and their immediate families.

“Simply put, WeCare offers a range of free life support and counselling services to policyholders that can be accessed at any time – not just at claim stage. The service is coupled with a suite of broad ranging referral services covering areas such as personal, legal, and/or tax issues, assistance with arranging a funeral, right down to helping out with sourcing providers of emergency accommodation in the event of a disaster,” he said.

The free counselling and grief support service will be on offer 24/7 for policyholders who need it. During business hours, there is a legal and tax assistance or referral service, including access to qualified lawyers, while the home assistance service can offer practical help for policyholders who suffer a disability, including gardening, cleaning, building services or child minding services.

Another addition to AIA Australia’s offering is the lifestyle advantage feature. By answering up to an additional nine health and wellbeing questions, eligible customers will be entitled to a 10% discount off their premiums with no additional medical testing required.

“The 10% discount is for the life of the policy, whereas other life insurers require clients to sign up and stay with a health program or undertake regular medical tests to continue to receive the discount,” Mr Mu said.

“We believe this will make administration easier for advisers by cutting time spent on the application process, all the while offering additional benefits to the end customer.”

“Our product enhancements will compliment the insurance ‘conversation’ that advisers have with their clients by allowing them to focus on the need for insurance without having to be inundated by the prospect of overwhelming medicals and complex product wordings,” Mr Mu said.

Other features include a new Maximiser benefit that will make it simpler for advisers who want to structure life insurance in superannuation.

Under an improved crisis reinstatement feature, policyholders may be entitled to receive a partial payment for a heart attack or cancer if they have previously received a prior full payment for one of these conditions. For example, after the first heart attack, 100% of the policyholder’s sum insured may be reinstated, with any subsequent heart attack being covered by a partial payment.

Increased income protection monthly benefit limits up to $60,000 are also being offered.

Later this year, advisers will also be able to submit new insurance applications and provide an electronic declaration / authority so they no longer have to chase client signatures, a measure which is also expected to cut significant time from the insurance application process.

The post AIA Australia makes new product enhancements appeared first on AdviserVoice.

APRA, Challenger Limited, Ernst & Young, the Institute of Actuaries of Australia, Suncorp Metway and Westpac Bank jointly sponsored the research project. The project, chaired by leading actuary Tony Coleman, considered the potential for market distortion or arbitrage due to current inconsistencies in standards, and the potential for systemic risk arising from the current frameworks.

The research was aligned with the current international agenda for proposed future regulation of banks and insurers. In a recent keynote speech on this subject, Adair Turner, Chair of the Financial Supervision Committee of the Financial Stability Board, noted the need for regulation to be “sufficiently consistent across sectors to guard against regulatory arbitrage” and for a “continually updated” regulatory understanding of the inter-connected nature of the financial system and systemic risks that may result.

“The aim of our research is to make a meaningful contribution to ongoing work aimed at better understanding differences in regulation between banks and insurers, while using the opportunity offered by the G20 process to identify situations where regulatory arbitrage, market distortion and systemic risk could arise,” said Tony Coleman. “In some instances, inconsistencies may result in a product provider choosing to manage a product from a part of a group where lower capital standards apply and therefore where a higher return on equity could be achieved,” he said.

The paper finds that materially different regulatory capital requirements currently exist in the area of term deposits and term certain annuities. In this case, both products provide a similar outcome for consumers (i.e. effectively an assured return of income and capital) but annuities have significantly higher capital requirements because they are provided by life insurers rather than banks. Higher capital requirements have the effect of lowering the overall return and relative attractiveness of term certain annuities. This outcome needs to be considered in the context of broader public policy.

In another instance, at a framework level, provisioning is treated differently between banks and insurers, despite conceptually seeking to achieve a similar purpose.

“The research also sought to recognise that any proposed regulatory reforms focused on greater consistency must also consider the inter-connected nature of the financial system and potential for systemic risks,” Mr Coleman said.

Ernst & Young noted that achieving consistency between sectors is not straightforward. In particular, APRA is constrained by history and by international regulatory developments that do not necessarily have the same objectives. However, APRA’s proposed conglomerate reforms provide an opportunity to achieve a higher level of consistency where appropriate.

The research also found that banking and insurance sectors would benefit from increased transparency in the calculation of provisioning and regulatory capital as this would:

• Allow a better understanding of the impact of current regulatory reform by providing clarity around the extent of potential increased conservatism of Basel III and the overall impact of insurance reforms
• Highlight areas of potential regulatory arbitrage by identifying the most capital efficient entity for bearing a given risk
• Enhance decision making by increasing awareness of best practice across internal modeling and highlighting areas of regulatory inconsistency
• Give a greater understanding of the quantum of capital buffers which would assist in risk/reward decisions

The post New research comparing capital requirements of banks and insurers in Australia appeared first on AdviserVoice.

In releasing the Diversified Sector Report, Zenith Investment Analyst Graeme Miller said from an initial group of 109 Diversified products:

• 3 were rated HIGHLY RECOMMENDED and
• 22 RECOMMENDED.

The 25 Funds that were rated RECOMMENDED or above have been placed on Zenith’s Recommended List and are candidates for client model portfolios.

Of this number, 11 Funds are new additions to Zenith’s Recommended List.

Given the high threshold required to achieve a HIGHLY RECOMMENDED rating, only 2 investment managers and 3 funds have attained this rating at the completion of this sector review. These funds are:

“Additionally, this year Zenith surveyed its client advisers and sought to provide them with additional insight they in turn may utilise to address many of the questions and issues they encounter when providing wealth creation, financial and retirement strategies for their clients,” said Graeme Miller.

Specifically, the three key areas of concern were:

• Is it appropriate for investors to have a heavy ‘home-country bias’ to Australian Equities?
• Is investing in term-deposits for income a sound investment strategy?
• How does Zenith fit Emerging Markets into a strategic asset allocation?

Home Country Bias

Several industry commentators have recently pointed to Australia’s relative economic health and strong growth prospects as justification for maintaining a high weighting to Australian Shares in a diversified portfolio.

Graeme Miller responded, “Zenith however, does not agree that a having a strong homecountry bias is optimal from a risk-adjusted returns perspective. Our principal concern lies in the increasing concentration in the Australian market, which is heavily weighted in the volatile resources and financials sectors.”

Zenith contends that two key drivers of these sectors – commodity prices and household debt, are both at historically high levels, which presents risks that should be managed prudently from an overall portfolio perspective.

Term Deposits and Investing for Income

A popular strategy amongst income-focussed investors has been to invest predominately into term-deposits.

Whilst term deposits are close to ‘risk-free’ in terms of the security of the cash flow received, they can also be considered a high risk strategy for those looking to invest for income whilst maintaining their standard of living over a prolonged period of time.

“One alternative to the above approach (which Zenith advocates) is to blend a number of income sources across asset classes, maturities, and risk levels, to ensure a well diversified flow of income that incorporates some protection against inflation,” said Graeme Miller.

Emerging Markets

There has been a continued push by managers to increase their exposure to Emerging Markets, which has given rise to the issue of what International Shares benchmark is most appropriate.

Zenith believes the use of the MSCI All-Country World Index (ACWI) is much more relevant for the purposes of performance evaluation, as at present managers are able to outperform MSCI World by including Emerging Markets exposure.

Classification of Defensive Asset Classes

Within a diversified portfolio, it must be ensured that defensive allocations are truly ‘defensive’ in nature.

Graeme Miller said, “This issue is part of a broader industry problem of inconsistent naming conventions being used for managed funds.”

“In reviewing Diversified Fund offerings, Zenith obtains full underlying portfolio data, which is then reclassified according to our own internal definitions of Defensive and Growth asset classes.”

“This allows us to make more accurate comparisons between funds, and results in funds being categorised according to their Defensive/Growth asset allocation. For example, the Advance Balanced Fund is classed by Zenith as a ‘Growth’ Fund, whilst the Perennial Capital Stable Trust is classed as ‘Moderate’.”

Zenith is confident the inclusion of responses and insights to current investor issues and concerns will be well received by the national research provider’s adviser clients that it will be incorporated as a feature or addition in future Sector Survey Reports.

For further information or a copy of Zenith’s Diversified Sector Review and Report, please contact –

John Nicoll
National Sales Manager
Zenith Investment Partners Pty Ltd
Tel (Direct): +61 3 8639 1212
Email: john.nicoll@zenithpartners.com.au

The post Zenith Diversified Sector Report Adds 11 New Funds & Also Addresses Advisers Client Investment Concerns appeared first on AdviserVoice.