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Greece: From collapse to compliance

Elizabeth Diffin

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Financial advisors discover new opportunities as Greece finds its financial footing.

It is no secret that the past 10 years have not been kind to Greece, the result of a financial crisis that left the country roughly $330 billion in debt. But financial advisors in Greece believe that as their country begins to emerge from its disastrous decade, there will be more opportunities than ever before.

For ordinary citizens, the financial crisis led to a lack of faith in the insurance industry, especially as bad-faith agents abandoned them when the bottom fell out of the economy.

“The financial crisis rocked the stability of the insurance market on all levels,” said Kyriakos Chatzistefanou, an 11-year MDRT member from Thessaloniki. “Clients were trying to understand if, where and how they would benefit through these financial changes, many times following the advice of insurance agents who abused them.”

In fact, Karolos Vasiliou Markouizos, RPS, REBC, believes the resulting fear and insecurity were even more significant than the impact on individuals’ personal finances.

“When the financial crisis began in 2010, the difficulty was the negative psychology of people, rather than the reduction in income that came a little later,” the 15-year MDRT member from Athens said.

So the challenge in 2019 comes in rebuilding trust, especially as economic difficulties have increased the need for certain protections.

“The collapse of social security in the two basic pillars of pension and health is leading most Greeks to search for solutions in our market,” Markouizos said. “Low birth rates will greatly affect the whole society, especially in conjunction with the increase in life expectancy.”

The financial crisis rocked the stability of the insurance market.
— Kyriakos Chatzistefanou

Dimosthenis Sykovaris, ACS, a 12-year MDRT member from Chalkida, anticipates that the downfall of social security will lead to new opportunities, particularly in the areas of pension planning and long-term health insurance.

Greece now has what Chatzistefanou describes as a “truly robust range of insurance products,” causing advisors to be more diligent in determining what products would be most advantageous to their clients.

“I strongly believe in the value of the institution of private insurance, and every time I come into contact with prospective clients, I am sure I can help them, as long as I understand what they want and what they need,” Sykovaris said. “Because of the broader range of insurance products I can choose from, I always need to familiarize myself with their particular characteristics, so as to make the most accurate proposal to the client, putting the client’s interest above personal benefit.”

Chatzistefanou says this focus on clients’ needs is even more important because prospects often think they know what is best, even without professional insight into the industry.

“Clients have been betrayed by the social health and pension system and see now that the light at the end of the tunnel is not the exit, but the train coming toward them,” he said. “Greek society has an opinion about everything — even in sectors they know nothing about. Clients do not know what their true needs are.”

This newfound emphasis on meeting clients’ needs has been assisted by much-needed regulatory oversight.

“During the first decade of the millennium, the industry in Greece wasn’t really accountable, but unruly and even opportunistic,” said Sofia Zervoudaki, BS, a 10-year MDRT member from Athens. “The framework of regulation we work under has become a lot stricter than it used to be, something that forces us to be highly alert and careful in the advice we give and the services we provide.”

The most recent regulatory change was the October 1, 2018 implementation of the European Insurance Distribution Directive (IDD), which supports competition between insurance distributors and increases transparency. The General Data Protection Regulation (GDPR) also impacts how advisors handle clients’ personal data, a shift that has been difficult for some, including Zervoudaki.

“We were always sensitive and discreet about our clients’ data, but it was by choice,” she said. “Nowadays it is obligatory to use the highest possible privacy settings.”

For Zervoudaki, the most difficult part of GDPR compliance has been remembering that she can’t call prospects without their consent. Instead, she has to ask the person who referred them to act as a middleman and obtain consent upfront, adding an extra step to the process.

This willingness to adapt their current procedures to meet regulations is key for Greek advisors, Sykovaris asserts.

“These regulations are intended to protect the consumer, so we must embrace them and make use of them for the benefit of all. I always try to collaborate with each client and analyze their desires and needs.”

As Greece surfaces from its dark decade of financial instability, additional changes are sure to be on the horizon. But Chatzistefanou believes one constant will keep financial advisors from becoming irrelevant in the midst of uncertainty: exemplary client service.

“I don’t think that any change can affect professionals who operate conscientiously for the benefit and needs of the clients."  

CONTACT

Kyriakos Chatzistefanou at kyriakos@chatzistefanou.gr

Karolos Vasiliou Markouizos at carolosmarkou@gmail.com

Dimosthenis Sykovaris at dsykovarismdrt@gmail.com

Sofia Zervoudaki at sofiazervoudaki@gmail.com

 

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