Insurers want tweaks to client-first duty

Nadine Tereora of Fidelity Life

In submissions on the Financial Services Legislation Amendment Bill, insurers acknowledged there was more disruption ahead for the sector.

“Change won’t be easy,” AMP said. “Legislative overhauls in financial services have continually and significantly disrupted the industry in recent years. However, changes are needed because there are deficiencies in the current regime. Without such changes professionalising advice and improving consumer outcomes won’t happen.”

Sovereign said the new regime should improve the financial services landscape. “We note that the proposed changes are likely to cause disruption to the industry. However, we are confident that through regular government consultation and engagement with the market, the final legislation will result in an industry that meets customer objectives by improving capabilities, standards, and support mechanisms.”

The insurers took issue with the wording of the client-first obligations that will apply to all advisers. Until now, it has been the first standard in the code of conduct for AFAs. RFAs have not been bound by it.