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[UPDATED] ISO announces details of its Disputes Resolution service; Alignment of tax rates logical; KiwiSaver saved.

Sunday, May 23rd 2010, 10:37PM 2 Comments

by David Chaplin

The Insurance and Savings Ombudsman has revealed details of its extended ISO disputes resolution scheme that will include financial advisers.

Ombudsman Karen Stevens said that advisers would be charged a base annual fee of $400 with a further charge of $1,000 per complaint "no matter how far it goes down the process".

However, the ISO will not accept fees or register advisers as members until the scheduled regulatory start date of December 1 this year.

"We'll start taking expressions of interest from July 1," Stevens said. "We're still trying to gauge how many members we'll get... and if the date [when advisers must join a disputes scheme] changes, we don't want you to pay money for nothing."

The Sovereign-aligned risk advisory group, SovNet, has already confirmed the ISO as its preferred disputes resolution provider.

Alignment of tax rates logical
PriceWaterhouseCoopers tax partner, Geof Nightingale, said the alignment of the PIE tax rates with the company rate in the Budget was "logical", with the incentive for investing in PIE products staying in place, albeit at a "slightly reduced" level.

Nightingale said the differential between the new top tax rate of 33% and the maximum PIE rate of 28% will be lower than currently where the top PIE rate is set at 30% versus 39% for income above $70,000.

KiwiSaver saved
KiwiSaver was not specifically targeted in the Budget, which actuarial consultant, Jonathan Eriksen, described as "a relief".

"That's a magnificent effort not to destabilise New Zealand's retirement savings system," Eriksen said. "The government could've made a terrible mess of it but it hasn't."

The government has budgeted for an increase in KiwiSaver tax credits from $656 million in the 2009/10 tax year to $880 million in the current period. At the same time, provision for KiwiSaver kickstart payments has declined from $377 million in the 2009 budget to $293 million in the latest Budget.

More on the ISO scheme
The Insurance & Savings Ombudsman has been approved to provide dispute resolution services to financial services providers and their customers.

The Insurance & Savings Ombudsman (ISO) Scheme's formal Government approval was received today. The approval means the ISO Scheme is now an approved dispute resolution scheme under the Financial Service Providers (Registration and Disputes Resolution) Act 2008, set up to regulate financial service providers and ensure access to consumer redress.

"This scheme will allow financial service providers to get the best of both worlds - the certainty and added value that comes from being involved with one of New Zealand's established industry Ombudsman schemes, while also getting the individualised service and support providers will want," Insurance & Savings Ombudsman Karen Stevens said.

Stevens said the ISO Scheme would help to encourage confidence in the financial services sector.

"The purpose of the financial adviser regulation is to provide New Zealand consumers with the confidence and dispute resolution support to confidently seek professional financial advice and to have a transparent and understood process for resolving disputes," she said.

Stevens said the ISO Scheme would be formally available for registrations later in the year but was mindful of the cost to financial service providers.

"It is important that both the consumer and providers get value for money out of this requirement. The registration process is an opportunity to assist providers maintain skills and standards for the benefit of the entire industry," she said.

- This is a release from ISO

 

« Government cuts tax on savings vehicles to 28%KiwiSaver mismatch a 'huge challenge' for advisers »

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Comments from our readers

On 24 May 2010 at 4:19 pm alan said:
"it is important that both the consumer and providers get value for money out of this requirement" says ISO. Having to pay $1000 if a complaint is made against you, regardless of the outcome, hardly seems fair if the complaint is malicious or unproven after investigation. If either of these, will the adviser be able to claim it back from the complainant or get a refund?
On 26 May 2010 at 3:53 pm John said:
The insurance adviser industry has always made sure we get value for money and never used hidden commissions ect ect
Commenting is closed

 

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