tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, November 1st, 10:39AM

Insurance

rss
Latest Headlines

Insurers welcome FAA changes

A decision not to pursue explicit commission restrictions has been welcomed by New Zealand insurers.

Thursday, July 14th 2016, 6:00AM

by Susan Edmunds

Natalie Cameron

Recommendations for a new version of the Financial Advisers Act were released yesterday, and include a level playing field for all advisers, who will all be subject to a code of conduct covering competency and conduct requirements. All will have to put clients first.

The Ministry of Business, Innovation and Employment said it did not recommend a commission ban as part of the FAA review because that would not be a "silver bullet" to improve the quality of advice.

It said commissions themselves were not harmful, and were just a means of funding the distribution cost of the adviser channel. Removing them could limit consumer access to advice.

A ban on commissions would not directly target poor conduct, it said, because the recent FMA report had shown not all financial advisers had high levels of replacement business, despite all being paid commissions.

It also would not address conflicts of interest for advisers in in-house distribution models.

But MBIE said it and the FMA would monitor advisers' conflict to ensure its measures were sufficient. It may also ask advisers to report on the soft commission they receive and will ask providers to disclose what they offer.

Natalie Cameron, chief executive of AIA, said it was a relief to see that New Zealand was not following the Australian example of heavy commission restrictions.

"It's pretty forward-thinking of the regime here."

AIA would be happy to support advisers who dealt with its products to help them meet higher standards that would be required of those who are currently RFAs, she said.

"I would also expect a significant transition period."

She said it would not be a bad thing to have more focus on the soft commissions offered.

Sovereign chief distribution officer Richard Klipin also welcomed the proposals. He said they seemed to fit into a global move towards higher standards and simplified structures but would represent a fundamental change for the New Zealand market.

He said advisers who were currently RFAs would have some decisions to make about the right business model in the future. "Our role through this is to work with advisers to help them make good and informed decisions."

Naomi Ballantyne, of Partners Life, said the only real disappointment of the proposals was that there were no direct measures to tackle replacement business - but she said that could potentially be governed by the code of conduct.

"It's good to have a code of conduct. I can't understand how you would allow anyone to give advice to anyone on a personalised basis without the requirement to meet standards of behaviour, particularly for financial services. That's something I have felt was missing right he way through."

Tags: AIA Partners Life Sovereign

« Kiwi company attracts $200 million global investmentFidelity names new CEO »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
Insurance Briefs

nib launches tool to support women through menopause
nib has launched a new health management programme designed to support women as they navigate the stages of perimenopause and menopause.

Employees are wanting health and life insurance
A new survey shows potential employees what life and health insurance benefits, but less than a third of employers plan to offer such benefits.

Chubb Life makes changes to trauma benefit
Chubb Life has made a series of enhancements to its Assurance Extra and Assurance Extra Business policies, including the addition of a new Continuous Trauma Benefit,

Resolution Life gets new president
Global life insurance group Resolution Life has appointed Moses Ojeisekhoba as its new President.

News Bites
Latest Comments
Subscribe Now

Cover Notes - Specific news aimed at risk advisers

Previous News
Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com
x