Newpark becomes a financial service provider

Newpark becomes a financial service provider | Insurance Business

Newpark becomes a financial service provider

Newpark has announced that it will turn into a financial advice provider (FAP), ditching its previous decision.

The announcement follows the sudden departure of Newpark chief executive Melanie Purdey as well as Partners Life’s decision to axe override commissions to dealer groups. The insurer will instead pay overrides to FAPs based on customer outcomes such as initial advice, cancellation advice, replacement advice, service activity, non-disclosure and misstatements, and customer service complaints.

“We still want advisers to become their own FAPs, and we will continue to help them do so. There is now a need to review this strategy and be flexible and look to offer a FAP to advisers sometime in the future,” Bernie McCrea, the new chairman of Newpark, told Good Returns.

“The flexibility of this is advisers can choose to still be in their own FAP, but others will want to come together under a structure that meets the needs and objectives of advisers, regulators, and our business partners.”

Read more: Partners Life axes override commissions to dealer groups

McCrea said Newpark has a secured balance sheet that would help with the launch of the new platform.

“This is not just a revenue-based decision. The marketplace is always evolving, and we want to remain flexible and offer concurrent models that respond to this new environment. This is where advisers will have choices where we will support them technically, operationally and financially into their future,” he explained.

“We will be consulting advisers, our business partners, and regulators for the exact format of our FAP offering and more announcements will follow in due course. We know there will be a tremendous amount of work to achieve this, and more information will follow as we have it available, but rest assured, we are 100% committed to advisers’ success.”