Slide 1: Compliance in sales – Who needs to be on a tight leash?
OVB Holding AG Compliance in sales – Who needs to be on a tight leash? Michael Rentmeister Chief Executive Officer OVB Holding AG Düsseldorf, 4 May 2015
Slide 2: Definition of compliance
Definition of compliance Or simply: Brief explanation: literally adhering to certain laws, rules. Source: Gabler Wirtschaftslexikon Allfinanz – simply better! 2
Slide 3: Agenda
Agenda 1 Compliance from a company perspective (organisational) 2 Compliance from a customer/sales perspective Allfinanz – simply better! 3
Slide 4: Agenda
Agenda 1 Compliance from a company perspective (organisational) 2 Compliance from a customer/sales perspective Allfinanz – simply better! 4
Slide 5: Unique and unrivalled – OVB is the only truly European financial advisor
Unique and unrivalled – OVB is the only truly European financial advisor ■ 45 years’ experience ■ Represented in 14 European countries ■ 3.2 million clients ■ More than 5,000 financial advisors ■ More than 500,000 new contracts per year ■ More than 100 product partners For instance, one in six Slova
Slide 6: OVB has been acting in its clients' interest for 45 years
OVB has been acting in its' clients interest for 45 years – Using a system in all countries Banks Insurance Building societies Investment Property companies companies companies Building society Banking products Insurance Infestment funds Property saving contracts PREMIUM SELECT STRATEGY (Cost) trans
Slide 7: Strategy 2016: OVB develops into the leading system sales company in Europe
"Strategy 2016": OVB develops into the leading system sales company in Europe Allfinanz – simply better! 7
Slide 8: OVB Holding AG: Independence through stock market listing and financial strength
OVB Holding AG: Independence through stock market listing and financial strength Current shareholder structure Share data 2014 WKN / ISIN Code 628656 / DE0006286560 Free float Deutscher Ring IDUNA 3.00% Krankenversicherungsv Vereinigte erein a.G. Stock market code O4B Lebensversicherung aG 3.74% 31.
Slide 9: Compliance is meant to help avoid or reduce risks
Compliance is meant to help avoid or reduce risks Risk principles Excerpts from the Risk Cockpit of OVB •• Brokerage income • New laws with influence on the business Brokerage income model •• Equity base Equity base • Risks to reputation •• Diverse Diverse partners andproducts partners and products
Slide 10: Compliance developments at OVB
Compliance developments at OVB CMS is part of general corporate governance Product partners Reliable partnership Sales partners Clients Security in daily work Cover needs Corporate Governance Regulatory framework management & monitoring Executive Board – Supervisory Board – Shareholders Risk Complia
Slide 11: Compliance management system corresponds to requirements for listed companies
The compliance management system corresponds to the requirements for stock listed companies and international scope Compliance management system Model of the OVB compliance programme Prevent Identify Respond Policies & processes Risk analysis Case tracking Remedy control Training Process controls we
Slide 12: Guidelines, rules and processes define the framework of competencies and responsibilities
Guidelines, rules and processes define the framework of competencies and responsibilities for the Group Guidelines Rules Processes Allfinanz – simply better! 12
Slide 13: Core areas of compliance for financial brokerage companies in general
Core areas of compliance for financial brokerage companies in general • Selection of partners and products • Recruiting / broker selection • Qualification/training • Advisory process − Analysis and consulting − Service − Quality assurance − Complaints management • Compensation and incentives • Manag
Slide 14: Agenda
Agenda 1 Compliance from a company perspective (organisational) 2 Compliance from a customer/sales perspective Simply better one-stop finance 14
Slide 15: The biggest need for regulation is in the area of Transparency
The biggest need for regulation is in the area of Transparency Allfinanz – simply better! 15
Slide 16: Complexity through regulation: Were the goals at least met?
Complexity through regulation: Were the goals at least met? Insurance contract act reform, 2008 – introduction of numerous information obligations in favour of consumer protection • Section 7 VVG Information for insured parties • Directive on information obligations for insurance contracts (VVG Info
Slide 17: Comparison: Fund-based products with and without guarantees
Can advosors trust the product provider? Comparison: Fund-based products with and without guarantees Start at age 30, end at age 65, EUR 100/month Company Type of product Product with guarantee Product without guarantee Insurer A 3-Fund-Hybrid EUR 127,096 EUR 127,288 Insurer B 3-Fund-Hybrid EUR 126,
Slide 18: Complexity through lack of transparency/completeness
Complexity through lack of transparency/completeness Source: Presentation at Ludwig-Maximilians University Munich, Munich Risk and Insurance Center (2012). Allfinanz – simply better! 18
Slide 19: Trust as a dimension of complexity: What can the clients expect?
Trust as a dimension of complexity: What can the clients expect? Example: unit-linked pension insurance (Online bid calculation, 29 October 2013) Allfinanz – simply better! 19
Slide 20: OVB welcomes PRIIPs... do insurance companies?
OVB welcomes PRIIPs ...do insurance companies? Fighting for transparency Excerpts from article on 4 April 2014 Apparently, there is a debate about whether all insurance companies will really be included and roughly what costs will be listed on the information sheet. "It is not clear to us that life
Slide 21: Legal requirements still have not been met since 2013
Legal requirements still have not been met since 2013 Altersvorsorge-Verbesserungsgesetz (AltvVerbG – Retirement Planning Improvement Act): introduction of product information sheets with uniform layouts for Riester and Rürup retirement savings plans. • Focus: transparency, comparability and compreh
Slide 22: Examples from other countries: Annual Cost Rate (ACR) – Hungary
Examples from other countries Annual Cost Rate (ACR) – Hungary Definition • ACR (Annual Cost Rate) = average return that must be generated over the term after deducting all costs in order to maintain the sums of the paid contributions • Self-regulation of the insurance companies • Unit-linked life i
Slide 23: Examples from other countries: Product map Poland
Examples from other countries Product map: Poland and unit-linked products • Basic information on insurance (goal, benefits, term, payment etc.) • Risks • Costs (admin, sales, transaction, risks) • Scenario calculations (cautious, realistic, optimistic) Allfinanz – simply better! 23
Slide 24: OVB says yes to PRIIPs
OVB says yes to PRIIPs But clear distinction of responsibilities PRIIP (product provider) Documented advice (financial (Packaged Retail and Insurance-Based Investment Products) advisor) Transparent information sheet written • Client's needs and desires in simple language: • Occasion for consultation
Slide 25: OVB has used advisory transcripts systematically since the mid-1990s
OVB and other major financial intermediaries have been using advisory transcripts systematically ever since the mid-1990s. Constant monitoring and improvement in advisory documentation is in the focus of the compliance management system Allfinanz – simply better! 25
Slide 26: Product and product partner selection at OVB as a key compliance aspect
Product and product partner selection at OVB as a key compliance aspect Premium Select Strategy General client Providers on the Products on the Client's needs needs market market 1 2 3 4 Needs analysis: Provider analysis: Product analysis: Individual Evaluation of general Quality check and Overall v
Slide 27: OVB premium select strategy
OVB premium select strategy The product managers of the OVB national companies have a special focus on transparency and act according to the following rules: Limit risks Capital investments, non-standard market service or risk exclusions, lack of transparency and risks for incorrect advice 9 Ensure
Slide 28: Examples of sales management from product providers
Examples of "sales management" from product providers, regardless of sales channel • Specific targets • Not multi-topic • Success plans • Sometimes concept-based • Incentives • Generally depend on product sales • Campaigns • Frequently not in client's • Benefit programmes for interest clients • Freq
Slide 29: Code of Conduct for OVB product partners (excerpt)
Code of Conduct for OVB product partners (excerpt) Product partners undertake • to comply with the principles of fair competition • not to violate national or international regulations and/or laws • to comply with agreements and treat business partners fairly • to protect data and business secrets •
Slide 30: What do financial advisors have in common with Medieval messengers?
What do financial advisors have in common with Medieval messengers? 1. They are needed! 2. They come bearing bad news Low interest rates Reduction in profit share Adjustment to premiums Insufficient performance Refusal of benefits Allfinanz – simply better! 30
Slide 31: Who needs to be on a tight leash? No one
Who needs to be on a tight leash? No one But: product providers must understand that if they don't offer transparency, they won't succeed in future Allfinanz – simply better! 31
Slide 32: Disclaimer
Disclaimer All contents of this presentation were prepared to the best of our knowledge and belief. However, we do not assume liability for accurate and complete content of the information. Reproduction and copying of this presentation without permission is prohibited. Allfinanz – simply better! 32