About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Friday, August 22nd, 4:19PM
rss
Latest Headlines

Conflict between advisers and investors

A review of the long-term savings industry in the United Kingdom suggests there is a conflict between consumers and the way independent financial advisers are paid.

Thursday, August 9th 2001, 7:17AM
FONT FACE="Arial">

A review of the long-term savings industry in the United Kingdom suggests there is a conflict between consumers and the way independent financial advisers are paid.

The review, which is backed by the Treasury, has been done by Ron Sandler, the former chief executiv of Lloyd's of London.

Although the review looks at just the UK market it is relevant to New Zealand as there are similar industry structures in place.

One of the big differences between the two markets is that the UK has a heavy-handed adviser regulation regime, while New Zealand has the opposite.

Yet this issue isn't a major factor in the report as it looks at industry structure.

The report says there are grounds for concern as to whether the competitive process in the industry is necessarily producing efficient investment and an appropriate range of products that deliver to the consumer an efficient risk-return trade-off at the lowest possible cost. There are various reasons for this concern:

  • many consumers lack the time for or expertise in investment and savings issues, and there is limited shopping around;
  • as a result products are usually distributed through intermediaries, who are subject to their own commercial incentives;
  • costs and charges are poorly understood by consumers and exhibit very wide variations across the various product markets;
  • high distribution costs generally create substantial disincentives for the
  • consumer to switch products or providers even where it might be in their best long-term interests to do so; and
  • The report asks whether there is a potential conflict of interest between marketing revenues and investment advice given out by advisers.

    Its concern is that incentives to give advice are not aligned with the consumer.

    "To the extent that advisers' incentives are not aligned with those of their clients, competition within the industry may not lead to optimal outcomes for consumers."

    The report also says unclear pricing and a lack of transparency over charges is another area of concern.

    « How to deal with increased volatilitySovereign takes regulation bull by the horns »

    Special Offers

    Commenting is closed

     

    print

    Printable version  

    print

    Email to a friend
    News Bites
    Latest Comments
    • van Eyk suspends fund redemptions
      “This event demonstrates the challenges in remaining an independent research house, when you're also a manager of money (assuming...”
      12 hours ago by Pragmatic
    • van Eyk suspends fund redemptions
      “http://www.theaustralian.com.au/business/companies/further-strife-hits-van-eyk/story-fn91v9q3-1227031253622# quote- THE...”
      15 hours ago by Hmmm
    • It's always the adviser's fault - not
      “How are we supposed to keep up with continually changing policy terms, conditions, wordings and exclusions? Then a new company...”
      15 hours ago by Andy
    • It's always the adviser's fault - not
      “I am sure we have all had it at times a client will ask us to go through their policy document to highlight what they have....”
      17 hours ago by Mark Ogden
    • Another record profit for a bank
      “Useful to remember that the banks massively widened the margin between the OCR and floating mortgage rates during the GFC,...”
      2 days ago by AFA Muggins
    Subscribe Now

    Weekly Wrap

    Previous News

    MORE NEWS»

    Most Commented On
    Mortgage Rates Table

    Full Rates Table | Compare Rates

    Lender Flt 1yr 2yr 3yr
    AMP Home Loans 7.24 5.99 6.39 6.65
    AMP Home Loans $200k+ 7.14 5.89 6.29 6.55
    AMP Home Loans LVR <80% - - 5.85 6.29
    ANZ 6.74 6.05 6.49 6.65
    ANZ LVR > 90 6.74 6.55 6.99 7.15
    ANZ Special - - 5.99 -
    ASB Bank 6.75 6.09 6.40 6.65
    ASB Bank Special - - 5.99 -
    BankDirect 6.75 6.09 6.99 6.65
    BankDirect Special - - 5.99 -
    BNZ - Classic - - 5.99 6.25
    Lender Flt 1yr 2yr 3yr
    BNZ - GlobalPlus 6.74 5.99 6.39 6.59
    BNZ - Mortgage One 7.15 - - -
    BNZ - Rapid Repay 6.74 - - -
    BNZ - Std, FlyBuys 6.74 5.99 6.39 6.59
    BNZ - TotalMoney 6.74 - - -
    Credit Union Auckland 6.70 - - -
    Credit Union Baywide 6.45 5.90 6.50 -
    Credit Union North 6.45 - - -
    Credit Union South 5.75 - - -
    eMortgage 6.04 6.15 6.69 7.19
    Finance Direct 6.10 6.45 6.69 7.10
    Lender Flt 1yr 2yr 3yr
    First Credit Union 6.45 - - -
    General Finance 5.95 6.25 6.50 7.10
    HBS Bank 6.15 5.85 5.99 6.25
    HBS Special - - - 5.95
    Heartland 6.45 6.75 7.00 7.60
    Heretaunga Building Society 6.25 5.85 6.50 -
    Housing NZ Corp ▲6.74 ▼5.99 ▼6.19 6.60
    HSBC Premier 6.84 5.95 ▼5.95 ▲6.55
    HSBC Premier LVR > 80% - - - -
    HSBC Special - - - -
    ICBC 6.75 5.99 6.39 -
    Lender Flt 1yr 2yr 3yr
    Kiwibank 6.40 5.99 6.39 6.65
    Kiwibank - Capped 5.65 6.50 - -
    Kiwibank - Offset 6.30 - - -
    Kiwibank LVR > 80% - - 5.99 -
    Liberty 5.64 - - -
    Napier Building Society 5.80 6.00 6.70 -
    Nelson Building Society 6.95 6.15 6.60 -
    NZ Home Loans 6.85 6.09 6.40 6.65
    Perpetual Trust 7.70 - - -
    RESIMAC LVR < 80% 6.59 ▲6.35 ▲6.58 ▼6.77
    RESIMAC LVR < 85% - - - -
    Lender Flt 1yr 2yr 3yr
    RESIMAC LVR < 90% - - - -
    RESIMAC LW DOC - - - -
    SBS Bank 6.15 5.85 5.99 6.25
    SBS Bank Special - - - 5.95
    Silver Fern 5.95 6.10 6.55 7.05
    Sovereign 6.85 6.09 6.40 6.65
    Sovereign Special - - 5.99 -
    The Co-operative Bank 6.70 6.00 6.00 6.25
    TSB Bank 6.74 6.00 6.19 6.60
    TSB Special - - 5.80 -
    Wairarapa Building Society 6.20 5.75 5.95 -
    Lender Flt 1yr 2yr 3yr
    Westpac 6.59 6.09 6.39 6.65
    Westpac - Capped rates - 6.74 6.99 -
    Westpac - Offset 6.59 - - -
    Westpac Special - - 5.99 -
    Median 6.64 6.03 6.39 6.65

    Last updated: 22 August 2014 10:14am

    News Quiz

    Pathfinder's monthly commentary questions whether world equity markets are in bubble territory given the S&P500 has done what since "the grim days of early 2009"? Their answer is worth reading!

    increased 139%

    increased 93%

    increased 39%

    increased 19%

    increased 193%

    MORE QUIZZES »

    About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
     
    Site by PHP Developer and eyelovedesign.com