Finding an insurance adviser you can check

The word broker is a hangover from general insurance and from overseas markets. In New Zealand life insurance, the regulated term is financial adviser, and the licensing sits with the business rather than the individual. A Financial Advice Provider — a FAP — holds the licence from the Financial Markets Authority. Advisers give advice either as part of that FAP, as an authorised body under its licence, or as an individual financial adviser engaged by it.

What this means practically is that you have two things to check: the person you are dealing with, and the licensed entity whose licence they are advising under. Both are on the public register.

The register is a floor, not a ceiling. It confirms someone is who they say they are and tells you where to complain. It does not tell you whether their advice is any good, how many insurers they can access, or whether they will still be around in five years. For those you have to ask.

1. 1Go to the Financial Service Providers Register at fsp-register.companiesoffice.govt.nz. It is a Companies Office register and it is free.
2. 2Search the adviser’s name, and separately search the firm’s name.
3. 3Check the entity is registered and what it is registered for — the register lists the financial services each provider is registered to give.
4. 4Check the dispute resolution scheme named against them. It should be IFSO, FSCL, FDRS or the Banking Ombudsman.
5. 5Ask the adviser directly which FAP licence their advice is given under, and check that entity too.
6. 6Ask for their disclosure information in writing. You are entitled to it, and it should cover scope, providers, remuneration, conflicts and complaints.

Then ask these, before you engage them

• How many insurers can you access, and which ones can you not place business with?
• Do you specialise in personal risk, or is life insurance a sideline to mortgages or general insurance?
• How do you get paid, and what happens to your commission if I cancel in the first two years?
• Will you give me a written recommendation with reasons before I apply for anything?
• What is your process when a client makes a claim — do you handle it, or do I deal with the insurer?
• Who looks after my file if you leave the industry or sell the business?

These are the details that decide whether the cover does what you expected. Read them before you compare on price.

• Anyone giving advice who is not on the register, or who is vague about the entity whose licence they advise under.
• An adviser who cannot say which insurers they can access, or who turns out to be tied to one.
• No written disclosure. It is a legal requirement, not a formality.
• A recommendation before a fact find. Nobody can recommend cover without knowing what you owe and who depends on you.
• Reluctance to discuss commission or clawback.
• No answer on what happens at claim, which is the point at which you actually need them.

Every New Zealand insurer writes life insurance in new zealand to its own wording, and the words are where the money is. Two policies that look identical on price can pay very differently when it matters. Closing that gap is the entire job of an adviser.

• Advisers who deal in personal risk daily know current underwriting appetite, which is the most valuable unpublished information in this market.
• A firm with a panel gives you a comparison; a tied agent gives you a product.
• Servicing commission gives an adviser a reason to still be there in five years, which is when reviews matter.
• An adviser with claims experience knows how to present a claim so it is assessed on the first pass.

There are three ways to buy life cover in New Zealand, and they are not equivalent. You can buy direct from one insurer, which means you see one product range and one underwriting appetite. You can buy through your bank, which usually means a single insurer’s product sold under the bank’s brand, often with narrower definitions. Or you can go through an adviser, who quotes several insurers at once and is required to put your interests first.

The premium you pay is the same either way. Insurers build adviser commission into their pricing whether or not an adviser is involved, so going direct does not get you a discount — it just removes the person whose job is to argue your corner at application and at claim time.

• An adviser can see which insurer is currently taking your health history on standard terms, and which one will load or exclude it.
• An adviser can structure cover across two insurers if that produces a better outcome than putting everything with one.
• An adviser handles the underwriting back-and-forth, and is the person who chases the claim when a family is least able to.
• An adviser has to document why the recommendation suits you, which is a written record you can hold them to.

We are a referral service, not an insurer. We do not quote premiums and we do not sell policies. What we do is put you in front of one licensed New Zealand adviser who can compare the market properly.

1. 1

   You tell us what you are looking at

   The form takes about a minute. Nobody asks for your medical history on a web form — that conversation happens with the adviser, properly, and only once you have decided to proceed.

2. 2

   An adviser calls you

   A licensed New Zealand adviser talks through your situation: who depends on you, what you owe, what you already have in place, and what you are actually worried about.

3. 3

   They compare the market

   The adviser quotes across the major insurers, checks which of them will take your health history on the best terms, and puts the options side by side in writing.

4. 4

   You decide, in your own time

   There is no obligation and no cost to you. If the answer is that you already have enough cover, a good adviser will tell you that.