Claim associations silent as advisers become casualties

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Associations are being told to be more openly vocal in their support for financial advisers.

Thursday, February 21st 2019, 6:00AM 4 Comments

Murray Weatherston

The spotlight is on the sector at the moment thanks to the Financial Markets Authority (FMA) and Reserve Bank report into life insurers, and the Government’s plan to crackdown on sales incentives in financial services.

The regulatory crackdown was discussed at a recent Stakeholder Engagement Group (SEG) meeting, which brings together a number of adviser associations.

But adviser Murray Weatherston, who represents SiFA in the group, said no one seemed to want to take the lead publicly to fight in advisers' corner.

"I find it ironic at a time when the Reserve Bank and FMA, apparently without authority, have launched a massive attack on the industry, individual insurance companies and adviser organisations that represent mortgage brokers and life agents, who are so clearly going to be casualties of the attack, are just completely silent. That staggers me."

Another adviser asked what associations were doing, saying there should be "full transparency on an ongoing basis as to what our bodies are doing for us and the money we pay".  "This silence and working behind closed doors has to stop - Industry bodies keep us better and more regularly informed and ask us our opinion and more importantly keep the consumer informed."

In a comment on Good Returns, the TripleA association said a key point was that there was no over-arching communications function. "One association can't speak publicly for the others."

SEG is seeking a meeting with the Minister to discuss its concerns.

"Most of the board members on these associations are advisers ... many put in a lot of voluntary hours in meetings and on submissions on behalf of advisers right across New Zealand."

Katrina Shanks, chief executive of Financial Advice NZ, said it was important that advisers knew the association was working on their behalf. 

"They may not always see it but we are always working behind the scenes to help create a sustainable financial services sector for the future to help people understand what quality advice looks like and the importance of New Zealanders seeking that.

"We are talking to people, getting our voices heard. They are understanding what we are saying. They’re supportive of financial advice. No one wants to dismantle the financial advice sector."

David Boyle, of Mint Asset Management, said product providers, not advisers, drove the remuneration structures that were being criticised. He said advisers were being hung out to dry.

"My personal view on this one is the behaviour is predominantly determined by the manufacturers. 

"Advisers also need to talk about the benefits of advice and so that customers see the value of it much like going to a lawyer or accountant.  They get paid based on a transaction at the time so you know the work done. Advisers get paid of the benefit of future outcomes which is quite hard to show at the time."

Tags: Financial Advice New Zealand Katrina Shanks Murray Weatherston TripleA

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