In this new feature, International Investment is highlighting some of our stand-out Q&A sessions and interviews taken from our recent Virtual Events programme and video interiews.
In this transcript taken from this forthright and revealing interview - originally broadcast live from II's Middle East Forum on November 17, 2020 - International Investment Editor Christopher Copper-Ind speaks to RL360/IFGL CEO David Kneeshaw.
CCI: David, to get the ball rolling, how do you personally see the future unfolding for the advisory sector in the Middle East?
"When the UK introduced a ban on commissions on most products, it caused a lot of unrest and many short-term problems...The net effect, however, is probably fewer advisers who are actually doing better," David Kneeshaw, CEO RL360/IFGL
DK: Obviously there's a lot of uncertainty at the moment, and that is understandable. But I want to look beyond that short term uncertainty and to how this is likely to pan out. Some of this is by design, and is what the regulators want. So the fact there is more regulation will cause a lot of unrest among advisers. This could have a temporarily unsettling effect on the industry.
But beyond that there is a set of rules, that effect transparency, behaviour and fairness. That is all by design and not dissimilar in principle to what goes on around the world. In countries where there has been regulatory change, the advantage is that advisers that embrace that change and commit to it have actually done extremely well.
When the UK introduced a ban on commissions on most products, it caused a lot of unrest and many short-term problems. The net effect, however, is probably fewer advisers who are actually doing better. And I see no reason in principle why that wouldn't be the same in the UAE.
What I'm saying is these changes are now here, and we as an industry have to adapt accordingly. The world has to move on now and say, "How do I adapt and do better?" I see no reason why good advisers cannot flourish in the UAE, as they do elsewhere in the world. But we are right on the cusp of change, and that can cause uncertainty, and people get worried. I completely understand that: it affects all sorts of companies, ours as well. But the future is pretty good, I think.
CCI: How, then, do you think life companies are responding to BOD-49 in particular?
DK: We at RL360 are obviously affected by our acquisition of Friends Provident in July 2020. In very simplistic terms, I think you have to be clear you're committed to the market, and we are. And then you have to ensure your products are well adapted to the transparency aspects, and that we have done also. It will take us a little longer to come to market with a new savings product.
This is partly because, post-BOD-49, the size of that market is difficult to gauge. When we look at the rest of the world we see a general move towards single premium business. I can't say for certain that will happen in the Middle East but this is the trend that is happening elsewhere.
CCI: Speaking of worldwide trends, obviously covid-19 has accelerated the adoption of technology around the world. What do you consider this change to signify for advisers?
DK: I think between life companies and advisers, I'm not sure if this change is profound. But we're now managing all our client relationships remotely. I don't think face to face will ever be killed off.
But at the moment there is no alternative. It's allowed us to do things we haven't done before. For example we've organised seminars with fund managers, and i think this would have been unheard of a year ago, even if it occurred to us we could do it.
It's not just that we're talking to people via Zoom, for example, but we've changed the way we're managing the relationship to provide other services through the technology. Between advisers and customers, I think the biggest change has been those who want to create new business opportunities remotely. And some of our advisers have really adapted very well, and have seen very little, if any, downturn to their business.
CCI: In what ways does RL360 stand out from the crowd? Or what are you particularly proud of?
DK: I don't think what people look for in a life company has changed that much. The delivery mechanisms have, but not really the products or service. If you're delivering good products, and are trustworthy and consistent, then people will give you business.
But it's the components that count. And I don't think anything's changed. Platforms such as Zoom, and the introduction of e-signatures, for example, have radically changed our delivery.
CCI: I've been struck by the low penetration rate for the sector in the UAE. Can explain the reasons for this?
DK: The savings business take-up across the western world, as well as in the Middle East, is very low. Which is a good thing, of course, if you're an adviser in that country as there is a lot of potential. But also I think some segments are seen as perhaps not sexy by the advisers as well as by the clients.
So pure protection, for example. And not just the UAE, in Britain too life insurance has always been undersold as a market segment. It might be that BOD-49 triggers advisers to reconsider how they work. An upturn in pure protection or term assurance, would be a good thing (not least because Friends Provident has a term assurance product). So I think although penetration is low, you can see it as a great opportunity for those who want to commit to the sector in this space.
To view all of the sessions from the recent II Middle East Forum click here.