Digital advice won’t be able to offer the real, personal tailored customer service that a broker can offer, NZbrokers’ chief executive Jo Mason says.
The comment was made during an interview on NZbrokers’ growth results last week, and on the back of the Financial Market Authority’s (FMA) announcement that it had opened applications for brokers and insurers to apply to rely on its exemption powers under the Financial Advisers Act (FAA).
“For me as a broker, my opinion of personalised advice is that you can tailor make a policy to meet a customer’s needs,” Mason said. “Algorithms (digital advice) will be able to do that but I don’t believe they will be able to offer the real, personal tailored customer service that a broker can offer.
“That’s not to say there won’t be a place for robo-advice, maybe in the lower end of the market, gadget insurance or things like that. Obviously, the success of Lemonade shows that. But I think when it actually comes to insuring their greatest asset and certainly their businesses, I think customers really look for that advice model through a broker and that’s the reason we have managed to grow.”
Last week, NZbrokers announced it had increased its market share and geographical presence by 35% over the past 12 months, while it increased its gross written premium by 20% for the same period.
Mason said the reason NZbrokers had grown was because people wanted face-to-face personalised advice, especially in rural New Zealand where many direct insurers have closed branches.
Last year, the FMA widened the suite of products that digital advice would cover to include insurance and KiwiSaver.
Brokers and insurers who want to use digital advice and rely on the FMA’s exemption powers under the Financial Advisers Act (FAA), will need to apply to do so. Applications were opened last month.
