[Comment] Advice matters

Advisers and the way they are remunerated continues to be under the spotlight and I believe it is time to change the focus and highlight the value financial advisers bring to New Zealand.

Good financial advice must be a cornerstone of the New Zealand financial sector. New legislation risks creating an advice gap, similar to those seen in other jurisdictions following similar debates, which is dangerous and will end up having a long-term damaging effect on many thousands of New Zealanders. 

Financial advice deepens our capital markets, by empowering and enabling New Zealanders to take responsibility for their own financial wellbeing. Unfortunately, commentary on financial advice continues to regularly have a narrow focus, undermining the role of financial advisers and challenging the public’s confidence in the life insurance market as a whole. The focus of the debate needs to change. We, as an industry, need to promote and support financial advisers as well as the value and importance of advice. In this respect, I applaud the position that the IFA and PAA have taken with the proposed formation of Financial Advice New Zealand. Fidelity Life supports this initiative and is committed to work with them, and any other interested stakeholder, to help build public confidence in the industry.

Why? Because New Zealand has a significant problem with underinsurance.  Many people do not get the cover that they need to protect themselves and their families. This is particularly so when it comes to income protection insurance. Although a person earning $50,000 will accrue $1 million gross over 20 years, most New Zealanders do not understand that their income is their greatest asset.  Only a quarter or so of New Zealanders have income protection cover. Advisers fulfil an important role in ensuring that people think carefully about their options, promoting the availability of products and making them accessible to consumers.