Independence concerns
Harvey says he doesn’t expect the tied agency background of the advisers joining Nexus to be a major issue going forward. “I’ve not yet met an adviser who wouldn’t like to offer a broader range of products, whether they are in a tied agency structure or not.
“I think that, given the reaction and enthusiasm of the advisers today, they really want to be able to show their clients that they can advise and put in place products not just from Zurich.
“There are good Zurich products out there, don’t get me wrong. It’s not that they wouldn’t want to sell them, but they will want to position themselves as advisers giving a whole range of different product solutions to their clients, from a range of different manufacturers.
“We are increasingly seeing consumers looking for choice, and that choice obviously comes across to these advisers – that is why they see the benefit in being there.”
He says Nexus will be introducing more mutual funds, which it doesn’t have on its list today. “There are a range of different products we can bring in that will enable advisers to give more choice to their clients and ensure they can service them holistically.”
Nexus plans to support the advisers with training and development, and processes that will help them filter through products and understand the right ones for their clients.
The new Singapore operation will begin by targeting the local and increasingly affluent domestic market. “For us, the first stage of our focus is really around those client segments for the service by the Zurich agents today, which is the local mass and mass affluent. That’s where we will focus first of all.
“Then, as we go forward, we will look to expand into the expatriate mass affluent and the high net worth-market segments, as well as the corporate sector through SMEs and small business owners.
“Singapore is a vibrant, growing economy that is very wealthy, and therefore there are lots of opportunities,” says Harvey.
And those opportunities are there, he says, despite the fact Singapore already has a state-run social security savings plan, the Central Provident Fund, that can be used to enable its citizens to build up money for retirement, pay medical bills and buy a home.
“As we all know, the level of funding you need to have for a good retirement is often a lot more than individuals really want to hear. There is still the need for retirement planning because, although the funding level is very good compared with other nations, it will still leave as many people with a gap they need to fill, which I think is where, again, the advice opportunity comes in.
“Understanding what people have today, and what they are going to need in the future, is where I think face-to-face advice really adds value to the client.”
FAIR’s fair
Harvey also welcomes Singapore’s proposed amendments to its Financial Advisers Act, known as the FAIR rules, which are designed to strengthen consumer protection rules and improve the quality of financial advice. “Overall, we’re a strong supporter of the FAIR regulations that are coming in. We think that the direction of FAIR is in line with the Nexus approach and philosophy of clients first.
“We believe the increased market transparency, and the market awareness being created at a client level through some of these initiatives, will strengthen the awareness of clients to look for, and get choice in, the manufacturer they talk to – and that is something we will be able to demonstrate to our clients.”
Harvey says it is likely that, for the financial advice industry, the new regulations could increase the cost of operating in the market. This would suit a scalable operation such as Nexus, which can build a sustainable business, where you can invest in technology and resources to support your advisers service their clients. We think it is in line with where we are as a company.”
