About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Friday, May 29th, 5:56PM
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
    • FMA starts major investigation into churn
      “Does anyone know if the Banks are included in this fishing exercise? And how will the FMA be able to differentiate between...”
      3 hours ago by I was wondering
    • Getting to know...Peter Leitch
      “And a thoroughly nice guy to boot. "Good on yer, Peter! We need more advisers of your ilk" (Wonder how many will scurry...”
      4 hours ago by Robert Oddy
    • Did issues paper miss opportunities?
      “This response is an attempt to get some debate going here. Angus is reported as making 3 major points here. I would grade...”
      4 hours ago by Murray Weatherston
    • Getting to know...Peter Leitch
      “Never met the Mad Butcher, I am sure he is a nice chap. I have met this Peter Leitch and he is definitely a nice chap; and...”
      4 hours ago by Giles Thorman
    • New Zealand advisers won't dodge bullet: Rickerby
      “The reality is and any decent broker knows it, Life Insurance is more of a commodity these days with guarantees of upgrade...”
      9 hours ago by Mark Ogden
    Subscribe Now

    Weekly Wrap

    Previous News

    MORE NEWS»

    Most Commented On
    Mortgage Rates Table

    Full Rates Table | Compare Rates

    Lender Flt 1yr 2yr 3yr
    ANZ 6.74 5.59 5.59 5.59
    ANZ Special - - 5.39 -
    ASB Bank 6.75 5.99 5.99 5.99
    ASB Bank Special - 5.35 5.39 5.39
    BankDirect 6.75 5.99 6.09 5.99
    BankDirect Special - 5.35 5.39 5.39
    BNZ - Mortgage One 7.15 - - -
    BNZ - Rapid Repay 6.74 - - -
    BNZ - Special - - - -
    BNZ - Std, FlyBuys 6.74 5.35 5.39 5.49
    BNZ - TotalMoney 6.74 - - -
    Lender Flt 1yr 2yr 3yr
    Credit Union Auckland 6.70 - - -
    Credit Union Baywide 6.45 5.95 5.99 -
    Credit Union North 6.45 - - -
    Credit Union South 6.45 - - -
    eMortgage 6.04 6.15 6.69 7.19
    Finance Direct 6.10 6.45 6.69 7.10
    First Credit Union 6.45 - - -
    General Finance 5.95 6.25 6.50 7.10
    HBS Bank 6.65 5.69 5.39 5.69
    HBS Special - 5.59 5.35 5.35
    Heartland 6.70 7.00 7.25 7.85
    Lender Flt 1yr 2yr 3yr
    Heretaunga Building Society 6.70 5.70 5.40 -
    Housing NZ Corp 6.74 5.70 5.99 6.29
    HSBC Premier 6.84 5.65 5.65 5.65
    HSBC Premier LVR > 80% - - - -
    HSBC Special - 5.29 5.29 5.29
    ICBC 6.75 5.99 6.39 -
    Kiwibank 6.65 5.39 6.09 6.29
    Kiwibank - Capped - - - -
    Kiwibank - Offset 6.55 - - -
    Kiwibank Special - - 5.39 5.39
    Liberty - - - -
    Lender Flt 1yr 2yr 3yr
    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 6.29
    Perpetual Trust 7.70 - - -
    Resimac 6.59 5.88 5.86 5.90
    SBS Bank 6.65 5.69 5.39 5.69
    SBS Bank Special - 5.59 5.35 5.35
    Silver Fern 5.95 6.10 6.55 7.05
    Sovereign 6.85 ▼5.35 ▼5.39 ▼5.39
    Sovereign Special - - 5.39 5.39
    The Co-operative Bank 6.70 5.29 5.39 5.49
    Lender Flt 1yr 2yr 3yr
    TSB Bank 6.74 ▼5.55 ▼5.55 ▼5.75
    TSB Special - - 5.29 5.40
    Wairarapa Building Society 6.20 5.75 5.95 -
    Westpac 6.59 ▼5.59 ▼5.59 ▼5.59
    Westpac - Capped rates - 6.74 6.99 -
    Westpac - Offset 6.59 - - -
    Westpac Special - 5.25 5.39 -
    Median 6.70 5.70 5.59 5.67

    Last updated: 29 May 2015 5:26pm

    News Quiz

    Along with Good Shepherd NZ, Ministry of Social Development and The Salvation Army which bank is involved with the No Interest Loan Scheme (NILS)?

    BNZ

    ANZ

    Westpac

    ASB

    Kiwibank

    MORE QUIZZES »

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