End this ridiculous war on selling
Financial advisers are about to become collateral damage in the latest round of successive governments' war against our right to think for ourselves.
Friday, May 11th 2012, 10:30AM 
11 Comments
by Niko Kloeten
In continuing the centuries-old tradition of populist appeal against salespeople, the government has come up with section 71 of the Financial Markets Conduct Bill, which as currently written would make it very difficult for financial advisers to do their job of prospecting for new clients.
However, it makes perfect sense if you, like most New Zealand politicians, believe people are too stupid to make their own decisions and therefore need to have their choices kept to a minimum.
Viewed in this light, the Bill protects people going about their daily lives from financial advisers lurking in nearby bushes, waiting to leap out and beat them around the head with "unsolicited" offers of financial products.
This includes KiwiSaver; if the government made it any more difficult to discuss its own savings scheme it would have to get the orange election guy to tell us about it.
One wonders how the regulators think advisers came across their "current and former clients", who are seemingly impervious to the advisers' mind-control abilites and therefore deemed safe to be "approached".
A more charitable view is that this is an unintended consequence of a part of the legislation that is aimed at door-to-door salesmen and telemarketers.
This brings up two questions. Firstly, when has there ever been a government-imposed bureaucratic regulation that didn't have unintended consequences? Secondly, what's wrong with door-to-door salesmen and telemarketers anyway?
They offer a service and although it's not always a popular one there's obviously a market for it, otherwise companies wouldn't spend all that money doing it. Two words for those who don't like telemarketing: caller ID. Door-to-door salesmen can also be dispatched with two words, albeit usually less polite ones.
If politicians were really serious about protecting us from unwanted door-knockers they would apply the same rules to themselves; I'd much rather talk to a guy selling vacuum cleaners than some slimeball in a suit telling me how he's going to use my own money to bribe me into voting for him.
The upshot of all this is that financial advisers, who have already been told by regulators what products they can advise on, now face the prospect of being told by regulators who they can and can't talk to. Surely this contravenes the right to freedom of association under the Bill of Rights Act?
But as pointed out by IFA president Nigel Tate, the real victims would be the New Zealand public, who are underinsured and financially illiterate and likely to remain so unless "offered" a cold hard dose of financial reality.
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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Comments from our readers
I regard what I do as a dignified way to make a living.
The worst thing about your comment is that you're avoiding the real issue being discussed, the poor, and likely worsening level of financial education in NZ is not going to be made better by this proposal, but far worse.
The insurance salesman that went from door to door used to be part of the landscape. There *was* dignity in that approach - because the ways of getting your message "out there" were so limited.
I was referring to the people that phone about shonky property investments and open the call by saying "hiya buddy, how's your day been?".
Or the people that knock on my door telling me about some unfathomable new phone/mobile/broadband package from someone I've never heard of. But they don't have any documentation - and the decision must be made now.
Or the tragic people selling Kirby vacuum cleaners who have a look of desperation as they try to keep upbeat as they go through their vapid, cheerless patter for the 50th time in as many minutes.
These organisations are openly exploiting vulnerable people and they are trying to rip me off. They are not doing it to educate me on telecommunications, property investment or vacuum cleaning from the 1930s.
They have decided that it is safer to go door-to-door because they can rip people off in relative safety. If they set up a shop or a stall - people can find them, see.
What is worse, they're doing it on *their* terms, right when I am in the middle of watching Spongebob i.e. "me time" - in my own house.
And the worst of all - I picked up the phone one evening and it was John Banks - a *recorded message* telling me how great he is. Good grief.
The more the life insurance industry argues that this sort of thing is OK, the more they put themselves in this illustrious company.
Just in case some of you are not aware, some lawyers are making house-calls, unheard of 10-15 years ago. Is that a problem? I do not think for once they are lowering their professional standards, that's innovation and they are hungrier, therefore, fully deserved the business.
We can't and shouldn't dictate how others should operate their business as long as they are making an honest living, but be thankful, we can choose our clients.
Telemarketing and door-to-door sales is an invasion of privacy to many people, myself included.
Personally, I don't favour blanket bans - an opt-in "do not call" register can work well, much like the one Australia set up in 2007.
No surprises that the Direct Marketing Association was particularly vocal in opposing the introduction, somehow associating it with 'free speech'.
You mentioned that CallerID exists - yes it does. I have been automatically screening Unlisted Numbers to VM for some time now.
I would greatly appreciate not having to have ALL inbound calls as opt-in.
Anon, I appreciate you helping out the many families in dire financial hardship - but you'd still be able to do that with a "Do not call" register. Typically it's only the high net worth individuals who sign up to this list, so you're still free to cold-call most of the poor and financially disadvantaged citizens of this land.
It's a pity that the article above doesn't point this out and was therefore overly alarmist at least as far as risk products are concerned.
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If you are having trouble breaking the ice at a social gathering anywhere in NZ, just say the above - and then sit back and enjoy the stories.
What you will hear will be a complete absence of respect or affection for the organisations that do it.
I would never be rude to the person at my door or on the phone - they are probably being exploited as well.
My wife has even been known to give them a brief pep-talk, convincing them that they are talented enough to find a better, more dignified way to make a living.
The only info I get from them is the name of the organisation they represent and then I make a mental note never to go anywhere near them, ever.
On this one, the politicians have read the mood of the nation correctly. To get a favourable outcome for financial advisers, the approach must be to acknowledge the problem - not deny it.