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November 05 newsletter

According to recent research, Australians are badly under insured. In a report commissioned for the Investment and Financial Services Association in Australia, it was found that "there is a gap of $1,370 billion between the level of life insurance cover held by Australian families and the level of cover required to shield against financial risk." Further it noted that "60% of those with dependent children have not got enough life insurance cover to look after their loved ones for more than one year."

From our experience, we suspect that similar results would be found in New Zealand.

Why not take this opportunity and set aside 30 minutes and assess the level of your insurances. This newsletter is a suggestion to allow the Shape of Money to partner you in that process.

But first we want to take the opportunity to explain how the Shape of Money differentiates itself from other insurance advisers in the market.

For example, how do you assess the competence and ethics of an adviser?

Whether or not you decide to use the Shape of Money, you should expect the following from your adviser or broker:

• Full disclosure of commission,
• Industry qualifications, and
• The demonstration, by your adviser, of their research into all the available products on the market.

Advisers are remunerated by commission. This can, unfortunately, drive the wrong behaviour. In general, advisers take a big hit of commission up front and a much lower servicing commission in future years. This tends to motivate the sale, but you are unlikely to see your adviser again in future years.

Instead, the Shape of Money takes a lower upfront commission, but is then entitled to a higher servicing commission in future years. This means we are keen to facilitate the sale, but we are not forcing the issue with clients because we don't have a large pay-day at stake. And with relatively higher commission paid in future years, you can expect to see the Shape of Money keen to review your financial position and goals on an annual basis.

the Shape of Money works in the following areas of insurance:

• Life insurance,
• Income protection insurance,
• Medical insurance, and
• Business insurance, including solutions for buy/sell agreements, debt repayment, key person and sole trader needs.

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Consumer debt is all bad. Check out the interest cost of your outstanding credit card debt.