Budget could boost advice promotion: Dodds

The Government should stump up some money in this year’s Budget to promote financial advice, the chief executive of the Institute of Financial Advisers says.

Thursday, May 25th 2017, 6:00AM

by Susan Edmunds

Fred Dodds said the Financial Advisers Act made it clear that a purpose of the law was to promote public confidence in financial advisers and brokers.

“There’s been no money from the Government in that category at all. We only end up with criticism and stupid surveys.”

But he said it was clear that clients who dealt with an adviser ended up better off.

Dodds said the Government should use today's Budget to put some financial support behind the sector.

The advice promotion aim has been removed in the new Financial Services Legislation Amendment Bill.

“They could turn that saving of ink into dollars and do something that is really, really important,” Dodds said.

Dodds said other issues the Budget should addressed included the cost of health insurance for older people.

Most health insurers were paying out almost as much in claims as they received in premium revenue, he said, so there was little fat to cut.

Help could take the form of a tax rebate, he said. “I’m paying about $750 a month for comprehensive medical over – we’ve claimed about half our premiums over a lifetime – what do we do now? Cancel and self-insure at the time when you might want a hip replacement?”

The Health Funds Association has also called for the Government to turn its attention to the sector.

“If we addressed some of the disincentives and penalties in the system, and instead moved to encourage health insurance, there is no reason why we couldn’t see health insurance funding much more [surgeries] in the future. That would help take some of the pressure off the Government budgets,” chief executive Roger Styles said.

KiwiSaver could also benefit from attention to contribution levels, he said. Too many people thought that joining and contributing 3% of their pay plus 3% from their employer would be enough.

Tags: Fred Dodds