First, a quick apology. COVID-19 disrupted our typical newsletter sequence, so this is a brief newsletter just to get things back to normal transmission.
I suspect as we exit the immediate impact of COVID-19, the medium-term economic consequences will now likely be front and centre for TripleA members and their families. It may be time to ‘batten down the hatches’.
As all the TripleA’s systems are cloud-based, and have all worked from home offices for years, for those aspects it is business-as-usual for us. Check out this article on working-from-home. You may find it topical at this tough time if you are doing the same.
COVID-19 has halted the rollout of the new legislative and regulatory framework until 2021, with the exact timings yet to be announced by the government. That means the impact on financial advice providers (FAPs) has been pushed back until next year, although, everyone is still being encouraged to get their transitional licence sorted anyway.
We have been signalling for some time that NZI would be making some major changes to our PI scheme as they had been working through the impact of the new regime for some months. On Friday 13th March, both Aon and NZI briefed the TripleA Board and we got our first real look at some of the detail.
Aon advised “…that the insurance market had endured many challenges over the last year with rates increasing for all classes of cover. That trend is likely to continue as further catastrophic losses crystallise. The PI space has proven to be a challenging one over this period and further hardening is on the horizon.”
NZI elaborated by outlining a couple of the key drivers: the international reinsurance market and “the FSLAA legislation which places more liability exposure on FAPs than advisers were previously open to. FAPs are also responsible for oversight, training, licensing, and product provision. FMA has received additional resources to advance their enforcement activities once the new regime is in place.”
The TripleA Board and all advisers, questioned both Aon and NZI extensively. While we understand many members won’t be happy with some of the changes and premium increases, the background Aon and NZI provided, clearly indicated that this was the new normal in respect to PI for financial advisers.
The main changes you need to note for 2020 are:
- As you have already been advised, NZI has moved the renewal date for the scheme from 1 May to 1 July.
- NZI is upgrading its online prop system. As soon as we are advised when the renewal process will run, we will let members know.
- The cost of an individual adviser’s base PI premium will increase from $1730 to $2200 pa (GST excl).
- The pricing for all other optional PI elements remains unchanged.
On a final sad note, Christine Eves our TripleA administrator sadly passed away on the 20th February from the cancer which she had been battling for a couple of years. Things deteriorated quite quickly and somewhat unexpectedly at the end. Christine was born in Germany and brought some real Teutonic efficiency to the admin function along with an ability to build common sense admin systems.
As CEO it was a delight to have someone on board for the first time in the support role that had the technical skills to operate and even upgrade our database, run Xero (our finance system) properly, and who could cover off all the other support and back office functions that the TripleA needed. Having such skills available was long overdue and the TripleA’s back office systems took a huge leap forward in 2018 and 2019 under Christine’s leadership. She was a huge asset, a delight to work with, and will be sorely missed. She leaves behind Phil, her husband, and two children Hannah and Oscar.
Vicky Coombes stepped in to help with the administration temporarily and we have now appointed Britta Hollmann as a permanent replacement. I’m sure all our members will welcome her to the role.
Wayne Smith, CEO