Advisers told: Get ready for major change

Kris Faafoi

The report, released on Tuesday, found widespread issues with the sector. Sales were being prioritised over customer outcomes, there was little oversight of adviser behaviour and commission structures had the potential to deliver poor results for clients.

FMA chief executive Rob Everett said the industry needed to fundamentally rethink the incentives given to sales staff and intermediaries.

"In our view high upfront commissions are not acceptable as they drive poor conduct and can result in poor customer outcomes," the report said.

Commerce Minister Kris Faafoi said Cabinet had agreed to get rid of sales incentives in the industry that were driving behaviour that was not in the best interest of consumers.