tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, February 23rd, 3:51PM

Insurance

rss
Latest Headlines

Opinion: Where risk comes from

A really good discussion paper on regulations for the new Financial Advisers Act has come out, and it's stirring up a good deal of debate. Here are just two strands of the tangled web.

Wednesday, July 8th 2009, 5:21AM 1 Comment

by Russell Hutchinson

One view runs like this: How can a company say the advice given to a client that recommended its product has nothing to do with them?

If the product and the advice combined fails to provide an adequate solution for the client, and the client decides to sue - who is the right target?

Is it the adviser, with few assets who made a tiny sum of money from the sale (relatively speaking), or the company with large resources that made a big sum of money from the product?

The other view has it: How can a company take responsibility for an adviser operating as an independent business, using processes of their own design, and recommending a range of companies and products?

How can they enforce the use of certain advice-giving rules or systems when the adviser will be seeing clients almost anywhere, a long way from the prying eyes of the company's compliance managers?

The first situation pretty much describes the problem with life insurers standing back, folding their arms, and saying to advisers: "we're a wholesaler, you get registered or authorised."

Sure, they might help, but it's your risk.

The second example describes the problem with companies adopting qualifying financial entity (QFE) status and trying to supervise a bunch of independent advisers.

There are, of course, solutions. But you'd be a fool not to spot the problems - as an adviser you will soon be asked how much risk you are prepared to take to retain your independence.

 

 

 

« Opinion: What is trauma for?Opinion: Asking the right questions »

Special Offers

Comments from our readers

On 8 July 2009 at 12:06 pm Bazza said:
Russell, it's not indepedence anymore, according to the discuission documents, because advisers who recieve commissions are evil and can by no way be independent, therefore we have to think up a new moniker for them, non-aligned, un-imbilicaled, free,...
Commenting is closed

 

print

Printable version  

print

Email to a friend
Insurance Briefs

nib adds specialist skills to its board
Two new board appointments at health insurer nib add new perspectives, chairman says.

nib gets new CFO
Alvin Soh has joined nib New Zealand as its chief financial officer. Heh is a chartered accountant with more than 20 years of commercial experience in leadership roles.

AIA kicks off footie campaign
AIA NZ has launched a campaign, offering New Zealanders the opportunity to win a trip for two to see Tottenham Hotspur play in London.

AIA Vitality numbers
AIA says its Vitality programme now 50,000 members and they have recorded material health improvements, demonstrating the gains that can be made when we take charge of our wellbeing.

News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News
Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com