Let's deal with rogue advisers
With the release of the FMA’s report on policy replacement, reactions have been many and varied. There have been calls for government intervention, investigations into non-adviser channel practices, and focus given to the methods of gathering new business for other non-life risk products in the market.
So let’s drill down and put some perspective on the issue.
The FMA made it clear that they were of the view that inappropriate replacement – so-called churn – had potentially negative consequences for consumers and that the activity levels in life risk insurance distribution, being dominated by advisers who, with 40% share are the largest single channel, would be the focus of their investigation.
Now, it’s true that there are other channels that would merit investigation, but the opportunity to examine the FMA findings more closely should not be passed up by those intent upon establishing the actual extent of the issue.
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