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Abu Dhabi, UAETuesday 11 December 2018

Friends Provident: Raising adviser standards an obligation for insurers

The insurer says its Financial Adviser Academy helps advisers offer better advice to customers

Philip Cernik, the chief marketing officer for FPI, says the company believes in improving standards on the ground, through face- to-face interaction with advisers. Courtesy: Friends Provident International
Philip Cernik, the chief marketing officer for FPI, says the company believes in improving standards on the ground, through face- to-face interaction with advisers. Courtesy: Friends Provident International

Take a glimpse at some of the more popular social media platforms and you will quickly realise there is discontent among customers in relation to the quality of financial advice in the UAE. This has been recognised by the local regulators, the UAE Insurance Authority, which is introducing new regulations that will force improved standards on financial advisers operating in the country.

Back in 2015, Friends Provident International launched its Financial Adviser Academy to help develop the adviser community and improve customer outcomes. Its sole purpose is to educate and train advisers, to help them give better advice to their customers. Focusing on key areas of technical, investment and soft skills, it has since assisted hundreds of advisers who are now better equipped as a result. We have invested heavily in this programme, but we believe in the development of advisers and consider it a worthwhile investment.

Other life insurers have begun to follow suit and launched their own versions of the Adviser Academy. We welcome this positive step toward raising adviser standards and think that all insurers should be focused on improving customer outcomes in our industry. The resources of insurers should be invested in improving the standards of the advisers they are working with, for the ultimate benefit of their customers.

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Read more:

Insurers and financial advisers at war over who to blame for poor advice in the UAE

Fixed-term investment plans are failing UAE customers, says Friends Provident

Investors wait for final push on mis-selling regulations

UAE Central Bank ramps up clampdown on banks mis-selling consumer and investment products

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At FPI we believe that the most successful way to improve standards is on the ground, through face- to-face interaction with advisers. We have found there is no substitute for being able to discuss issues directly with advisers. Deploying a specialist on the ground means that we are able to gather feedback on the main issues faced by advisers and then shape training and development courses to meet their specific needs.

When the IA publishes its new regulations for life insurance and family takaful, it is expected that significant measures will be introduced in relation to the advisers the regulations govern. These measures include the registration of individual advisers, annual fees and the requirement to meet and maintain minimum professional standards. Advisers will have to carry out annual reviews with customers to ensure they remain on course to meet their goals. This means they will not be allowed to just take their commission and move on to the next customer.

Advisers will only be able to recommend insurance products of life companies that are authorised in the UAE. This has become a hot topic in the region. Some life insurers have set up in the Dubai International Financial Centre as pure investment companies, selling capital redemption products, as there is currently a moratorium on the issue of new life insurance licences. These companies will not be subject to the regulations of the IA and some IA authorised advisers may seek an additional Dubai Financial Services Authority or Securities and Commodities Authority licences, effectively circumventing the proposals of the IA.

Meanwhile IA licensed insurers continue to make plans for the new regulations designed to improve customer outcomes. We are not waiting for the new regulations to be introduced and are continuing with our mission to improve professional adviser standards in the UAE.

Philip Cernik is the chief marketing officer for Friends Provident International, Middle East and Africa