Sovereign Sees Positives In Governance Proposals

April 11, 2008

Media statement

Sovereign Sees Positives For Advisers In Governance Proposals

Impending legislation* that will increase governance and regulations around the activities of financial advisers has the potential to work to the advantage of professional advisers, and could also lead to an increase in the level of business they write.

This was the underlying message delivered by Simon Blair, Managing Director of Sovereign, to more than 350 guests at a gathering of high achieving advisers in Christchurch last night, hosted by Sovereign.

Blair told the advisers that regulation did not automatically signal an ‘end of independence’ for the country’s network of advisers and brokers.

Rather than being a ‘harbinger of doom’ in terms of the impending industry change, Sovereign was of the view that “change created opportunity … and Sovereign is planning for every eventuality, every contingency.”

Blair cautioned advisers to wait for the ‘ink to dry on regulation’ before they committed themselves to any one or an irrevocable course of action.

He said the potential existed for key elements of the proposed regulations to change as the legislation went through the consultation process, and there was a number of options advisers could adopt to address their obligations.

Sovereign was committed to offering calm re-assurance to the adviser community, providing industry leadership and a level of certainty to those requiring it said Blair.

He said Sovereign believed there was still considerable growth potential in the market, and that insights from UK and Australian observers backed up this view.

Blair said the considered and diligent approach Sovereign had towards regulation was also a key factor underpinning Sovereign’s current run of growth and market successes.

“Our market share increased, adviser satisfaction levels rated us very highly, our A M Best rating was upgraded to A+ (Superior) and we continue to enjoy strong profit growth.

“When you consider events surrounding finance companies and the impact of wider economic forces then it is at times like this when the benefits of a business approach that is strongly grounded in prudential management comes to the fore”.

* Financial Advisers Bill and Financial Services Providers Bill

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