Rod Severn (pictured) is an experienced executive. Being introduced to the insurance industry was bitter-sweet for him because it meant being saved from retirement and going back to the corporate world.
Now, Severn is the chief executive officer of Professional IQ College, a leading provider of professional training and continuing education to the insurance and finance sectors in New Zealand.
Insurance Business caught up with Severn to learn more about his insurance journey. In this Q&A, Severn also talks about new regulatory measures for financial advice, the pending retirement of baby boomers in the field and the future of insurance education.
Insurance Business: Who or what has inspired you to be involved in the insurance and financial services industries?
Rod Severn: In late 2013, I was happily enjoying my retirement when I got tapped on the shoulder by one of the (then) board members (and my personal financial adviser) of the Professional Advisers Association asking if I wanted to run the association. As my wife had reminded me on several occasions that she had married me for breakfast and dinner, not for lunch, I agreed to go back to work! I have loved every moment of it.
IB: You previously worked and held senior roles at Sun Microsystems, Maxnet and Smartpay. You were the CEO of the Professional Advisers Association and now CEO of the Professional IQ College. What have you learned from these experiences and how do these lessons help you now?
RS: Running a business is largely the same regardless of its size. You need to be able to pay staff and the rent, sell your products, or manage your members, instill a healthy culture of safety, fun and achievement, be an inclusive leader and don’t be an isolationist.
People run a business. The name of the business is your marketing tool and something to hang on the front door shingle but without aligned staff, who know where the business is going, who want to come to work each day, who want to succeed in their ambitions (and are given the opportunity to do so), then its going to be a tough daily grind.
IB: Tell us briefly about your role at Professional IQ College and in the industry as a whole.
RS: Professional IQ College is a fully accredited NZQA training establishment delivering education and ongoing professional development to the 8,500 financial advisers across New Zealand. We deliver qualifications across residential lending, health and life insurance, general insurance, investment and financial advice.
My role as CEO is to ensure the business is functioning to its maximum capacity and to look to the future for emerging trends, directions that we take advantage of to ensure a successful and profitable college is still around tomorrow.
IB: How are educational qualifications and continuing professional development important for insurance brokers and advisers?
RS: The financial services sector has been overwhelmed lately with legislative change, tightening, loosening and then tightening of regulatory lending policies, housing boom bust cycles and now FSLAB, code of conduct, insurance contract law review, the enforcement of qualifications and a review of the advisers earning capacity via a review into commissions and soft dollars. All in all, some might well challenge the reason to stay in, or even join the industry right now.
And then there is the discussion around whether we are a profession or an industry. Continuing to challenge our standards and find ways to improve and grow is never an easy option. To do this, we need to be aggressive with our standards and compliance, character and effort and be bold enough to see the future and not give in. Change is inevitable. We need to confront it, not hide from it, and be willing to take on the opportunities that are presented with those challenges.
When we look at what makes up a bona fide profession, the hallmarks are typically:
- A unique and specialised body of knowledge, one that is not generally accessible to the public.
- It usually requires advanced schooling from a university or higher education body.
- Proof of outcomes so the public are assured the adviser has learned their craft and can apply that to their role.
- A recognition from the public that this craft is a necessity within the community.
- Ethics, client care and competence are all demonstrable.
- A binding code of conduct that defines what a professional practice looks like and the disciplinary rules and regulations behind it to ensure those who do not “scrub up” are treated accordingly.
- Membership to a professional body that represents the sector in terms of lobbying, ongoing professional development and networking.
- A profession that actually controls the use of its designations, so the public can clearly distinguish between the professional and those claiming to be so.
- A defined and recognised program for ongoing professional development.
So, do you, or will you meet the above criteria? For many advisers in the field right now there is a choice to make. Do you, over the next two and a half years, knuckle down and get your house in order, or do you swing in the breeze and then hang the “for sale” sign out the front and retire or look for a new job?
In my view, now is a great time to knuckle down. There will be some attrition, no doubt, over the next few years, so there will be a real need for quality advisers to continue to help New Zealanders achieve a better financial outcome. New Zealanders need you. You need them. There are plenty of them to go around. Those that get their house in order early, get educated and qualified will be the ones who will lead this industry into a profession.
And this is not a difficult industry in which to become “professional.” At most it will take a newcomer to the industry approximately 12 months to attain the minimal acceptable standard to becoming a financial adviser i.e. Level 5. A hairdresser takes three years. Most trades are three to four years. Doctors, lawyers, accountants much longer. If you have been in the financial services sector for some years it should only take you around 200 hours!
Professionals invest in themselves. Personal and professional growth is pursued constantly. Yes, it takes time, effort and money but it does pay off and it will far exceed the cost.
Education isn’t just about learning something. It’s about developing that edge that makes you stand out in the crowd as a knowledgeable professional.
There is real value in education.
IB: What are the other key issues facing insurance brokers today?
RS: As stated above, this industry has seen a lot of legislative change happen over the past several years with much more to come over next few. Raising the bar means additional cost, time and effort but the rewards will be worth it. Another major issue facing this industry (like many others) is the pending retirement of the baby boomer demographic. There are many advisers in this category, and I am worried that we will not be replacing them anywhere near as fast as they move out. This has the potential to hurt New Zealanders looking for assistance with financial advice.
IB: What advice can you give to those wanting to join the insurance industry?
RS: This is a great opportunity to create a long, satisfying and profitable career in the financial services sector. There is plenty of room particularly with the retirement of many baby boomers for new entrants into the field. When you talk to advisers who have been in the industry for a while you get to understand how highly rewarding (both personally and financially) a career can be, and I would highly recommend it.
IB: What is one thing that most people wouldn’t know about you?
RS: As an Australian, I am a descendant of the First Fleet (which is quite a “thing” in Australia), but seeing as I have been here since 2002, I am in the process of applying for my NZ citizenship.
IB: Complete this sentence: If I wasn’t in insurance and financial advice, I would be…
RS: Out travelling around this fantastic country. I don’t think people realize what a magnificent country New Zealand is. I love exploring it.