FMA focus on churn no surprise

In its Strategic Risk Outlook for 2015, the FMA says it wants to address the misselling of financial products, including KiwiSaver and insurance products.

“Misselling of insurance products, including selling products that do not meet the customer’s needs, or churning of customers is an area of concern. We have received an increasing number of complaints regarding insurance sales and will undertake work to more accurately size the problem. Insurance misselling will be included as a key monitoring theme for our team.”

It said it would prioritise reports of RFA misconduct, particularly in relation to insurance misselling.

David Whyte, of DCW Management, said that seemed to imply that the FMA was going to decide what constituted good practice. “Is it in the interests of the client or otherwise? They will use their monitoring resources to get close to that issue.”