As New Zealand’s financial services sector goes through its biggest period of change, industry leaders with interests across the Asia-Pacific region say they are seeing similar shifts happening worldwide – and the region may have a lot to learn from how New Zealand is handling things.
Sam Tremethick, chief partnership insurance officer at AIA, previously held roles at the company’s Hong Kong office, and was responsible for strategy across 18 Asia-Pacific markets. He says the region is a huge patchwork of different economies, cultures and industries, but that there are also certain similarities between them when it comes to regulatory change in financial services.
“First and foremost, I think it’s wrong to consider ‘Asia’ as a homogenous place,” Tremethick said.
“It’s very much a lot of separate economies with their own personalities and different levels of governance and control in the industry, and that’s based on where they are and their geographical position.”
“But there is also a consistency, and that is that every regulator in every market wants to improve the professionalism and conduct of their financial advisers – they’re just starting at different points,” he explained.
“In some markets, the advisers and agents are part-time motor salesmen or boat distributers in the local community. That’s not to say they’re not good at what they do – it’s the cornerstone of how our industry develops. But they do have a place of trust in their community, and that’s the critical piece.”
Tremethick says that regulatory change in any country is about bringing a level of professionalism and good conduct to its players, because ultimately, the industry is nothing without that trust.
“Trust is a person-to-person theme,” he said. “The financial adviser-client relationship is one which is personal, and that mustn’t change.”
ANZIIF CEO Prue Willsford also has significant contact with the industry across Asia, and she says New Zealand’s ‘principles based’ approach to conduct has resonated strongly across many countries, partly because of its adaptability to the culture and practices of other areas.
“The important part of the conversation is not about building consumer trust – it’s about building trustworthiness,” Willsford said.
“That trustworthiness is something you can control. We work right across Asia, and it’s certainly correct that Asia is not one single place – a lot of countries are coming from a lot of different starting points. There’s a huge agency force in many countries, and that causes its own issues.
“The regulators are looking to Australia and New Zealand, and particularly to the Code and the culture and conduct reviews,” she explained.
“We have found as we work across the region that the New Zealand approach resonates very strongly, partly because it’s principles-based. That can be naturally adjusted to the level of development of each of the markets.”
Willsford noted that Hong Kong is one of the countries seeing a massive step-up in terms of licensing requirements, and similar step-ups are happening across Indonesia, Vietnam, Malaysia, and other nations. She recounted ANZIIF’s meeting with Chinese officials, whose biggest issue was the sheer number of agents that the country needed to deal with.
“ANZIIF recently hosted the head of markets from the Chinese Government, and they’re dealing with 10 million agents – so they’ve got a bit of an issue, and they were coming for advice on that,” she explained.
“Different areas have different challenges, but we have found that New Zealand’s principles-based conduct and culture approach has resonated very strongly right across Asia.”