Advice You Can Trust

Russell Smith and his wife, Marian D'Eve, died when their Cessna 182 crashed into the sea off North Canterbury, in August 2005. Dr Smith was the founder of Pulse Data, a company known internationally for its Braille and speech technology, screen-reading software and video-magnification solutions. It has an annual turnover of around $50 million.

Imagine yourself as the Air New Zealand chief executive Rob Fyfe. Speaking to the families, after the A 320 that crashed into the Mediterranean Sea near Perpignan off the south coast of France that killed all onboard? How would you cope having to speak at the funeral and inquest after the death of employees? How would your family and business partners cope?

What’s Risk Management?

It is the procedure of identifying and managing threats that could severely impact or bring down your business. Death can have enormous consequences on your business and family. Risk management is often thought of as getting the right insurance.

So what do insurance brokers do? We help you to identify the risks that you and your business may be exposed to. When you – or any of your key people – are affected by serious illness, disability or premature death, it could be a disaster to your family’s current and future financial security. As a business manager or owner, here are some important questions you need to consider:

Green Party co-leader Rod Donald was 48-years-old and a father of three who died suddenly soon after the 2005 election.
Insurance Broker and father of three Austin Hemmings, was 44-years-old when fatally stabbed while going to the aid of a woman who was screaming for help.
Founder of Independent Liquor 50-year-old Michael Erceg was killed in a helicopter crash in 2005.
A 40-year-old man was crushed to death by a digger, the man working on a commercial construction site on Highbrook Dr, East Tamaki, when he became stuck between the digger and its arm.
The death of a 36-year-old Paul Robinson, of Tapawera, south-west of Nelson, died after his machine plunged 15m off a Taranaki farm bridge and into the Mohakatino River.
In October 2008 a Nelson construction company was ordered to pay $80,000 after an employee suffocated and died in a worksite trench collapse, about half a cubic metre of wet clay from the unsupported bank fell on him. In a Nelson courtroom filled with teary-eyed relatives of 34-year-old Shane Darin Cockroft, who died at the worksite. Company director Owen Burgess said that the "tragic circumstances" had taken a toll on everyone involved.
The tragic death of Graham Dick at Firth Industries, the Richmond concrete plant's masonry supply manager, died after he became trapped in a sand hopper.
The inquest into the deaths of seven Crop & Food Research employees and Michael Bannerman, 52, the pilot of the Piper Navajo Chieftain crashed near Christchurch airport in 2003. Imagine the impact on your business, as this crash killed seven Crop & Food Research employees Howard Bezar, 55, Katherine Carman, 35, Alistair Clough, 37, Richard Finch, 41, Desma Hogg, 41, Andrew Rosanowski, 37, and Margaret Viles, 53.

Your Family

When an unexpected event happens to you, or a key person in your business, would your family's financial future be put at risk?
Would your family be able to continue servicing the home's mortgage?

You, the Manager or Owner

How would your business revenue be affected if you suffered a serious injury or illness?
Can your business survive if you were unable to work?
Would you still have a business after 6 to 9 months?
What impact would the death, or serious illness, of a spouse/partner have?

Your Business Partners

How would your business be impacted if your partner becomes ill or disabled?
Can your business survive the loss of a partner?
Have you resolved business ownership issues between partners?

Your Key Employees

Is your business reliant on a key person’s expertise?
Can your business handle the unexpected loss of a key employee, because of illness or death?
How would you pay for their long-term replacement?

The rules that apply to advisers in New Zealand have been have been changing rapidly since February 2008, financial advisers must provide clients with a "disclosure statement" before giving advice. This disclosure statement sets out key information including experience, qualifications, criminal convictions, fees and conflicts of interest. The Financial Advisers Act 2008 comes into force at the end of 2010. This will bring adviser regulation into the 21st century, and align New Zealand with international best practice. Under the new laws, insurance brokers will have to be authorised and be listed on a national register.

Here is the seven step process an experienced, reasonable, prudent and well qualified advisor will follow, this should result in advice you can trust.

To get a letter of engagement from you.
To give you a Disclosure Statement.
To complete a Fact Finder about your affairs.
To analyse your data using the latest software.
To give advice in a written report.
To help you implement the recommendations.
To review your business & family circumstances every two years.

The process married together with report-writing software, a good example is InControl created by Chris Louisson of Risk Management Solutions. Your personal details, your business Profit and Loss and Balance Sheet are all entered into your file, by a qualified accountant. To top it off we spend one hour asking you questions about your risk management preferences. This allows a thorough analysis and good solid recommendations to be made as to the financial risks in your business. My advice is that before you appoint a broker do your homework and take responsibility for choosing a “good” adviser. Because a good broker is the best insurance you can have.

Disclosure: Lucas Remmerswaal is an insurance broker a disclosure statement is available, on request and free of charge, from: here