No good reason for soft dollar commissions: Naylor
He said “soft incentives” for financial advisers from product providers would eventually be banned in New Zealand, as they had been in other places around the world.
The Australian Securities and Investments Commission said in its report on the Future of Financial Advice legislation that soft incentives led to inappropriate behaviour from financial advisers. They are banned from July 1 this year although advisers will still be allowed to accept IT support and software, training and benefits worth less than A$300.
Britain will also ban them this year and Naylor said they had been identified by the United States Congressional committee as a key factor behind the heavy promotion of inappropriate debt products and a contributor to the global financial crisis. Bans were being discussed, he said.
Naylor said those three countries were New Zealand’s most important source of regulation ideas, so it seemed likely this country would follow suit.
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