Jack Newman, Lucid Advice
The firm launched in the last week of July. Newman says the heart of the business is “mum and dad, four kids and a mortgage,” and one of its main targets is to help other local families with their cover.
Newman has 15 years in the industry, and was formerly head of aligned advice at AIA NZ where he ran the insurer’s FAP license. The new business hasn’t brought an existing book and is starting from scratch - something Newman says has been eye opening.
“It’s really highlighted that a lot of people aren’t out there waking up, looking at the sun and thinking, ‘I want to buy life insurance today!’,” he tells Good Returns. “We all know that, but diving into it without a client base and trying to generate those conversations has been a bit of an eye opener.”
“One of the great things about having been in the industry for so long is that I have so many connections,” he adds. “I met with a lot of established advisers and took in their wisdom. They have been fantastic sounding boards.”
The cost of starting from scratch
After sitting on the insurer side of the table, building Lucid Advice has been a crash course in what advisers deal with day to day. Newman says stepping out under his own FAP licence has brought a fresh appreciation for the regulatory side of the business - and the unexpected costs that go with it. He notes that there were some surprises there, despite the thorough research beforehand.
“It probably has been a bigger jump than I thought, but at the same time, I know that the first few months of starting a fresh advice business is going to be a slow grind,” Newman says. “We’ll work through that.
“It would be amiss not to mention the costs involved in setting up your own FAP license and getting going. That did surprise me a bit. I’d done a fair bit of work understanding those costs before making a decision, but there are hidden things that you don’t necessarily think about.”
Still, the experience of running a FAP has proven valuable. Newman says AIA NZ’s FAP is still one of the more solid offerings in the market with a ‘conservative’ approach, and it sets up a good understanding of what needs to be done when talking to clients.
Raising awareness
Coming from the insurance industry, you tend to live and breathe insurance and spend most of your time around people who do the same. Now on the adviser's side, Newman says he’s had to simplify the way he talks about insurance.
Most people understand the term ‘life insurance,’ and not much beyond that.
“After 15 years in the industry, I’ve got an understanding of insurance - but a lot of New Zealand doesn’t,” he says. “People are not really sure what’s out there and what their needs are. I’ve been conscious of that in terms of my own language and how I’m speaking to clients.
“We’re trying to hone in on helping those younger families with kids coming along for the first time, buying a house, etc. who are time-poor and likely on a tight budget.”
Newman says the business is going to focus on the local community for now, and then look at expanding across the North Shore or further afield in Auckland in the coming years. He’s also looking to build a good network with other professionals in the area.
“That’s local mortgage advisers, accountants, real estate agents, etc,” he says. “We want to work with them and support their businesses as well, and ultimately work together to support the community that we live in. That’s our real target for year one.”
