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: Tuesday, August 4th, 10:16PM

Blogs

rss
Latest Headlines

A bob each way on commissions

Wednesday, October 20th 2010, 4:56PM

by Philip Macalister

Talk about having a bob each way. Last week I went along to AMP's media presentation on what it calls "clear pricing" which in layman's terms is removing commission payments from investment products. The move is to be applauded. It showed a couple of things. Firstly the ISI's bombshell earlier this year that its members would move to a voluntary ban on commissions on investment products isn't likely to happen any time soon. AMP managing director Jack Regan said he held off the "clear pricing" announcement to see if either the ISI or the government was likely to do anything. For him the waiting time's over. If one had to speculate what's happening one would suggest that someone on the ISI board pushed the organisation to drop its bombshell as the Australian government had made some noises around commissions being banned. This was premature and ISI members weren't fully on board. It's OK for AMP to make its announcement as most of its distribution is through its own advisers. For managers like ING, which rely on independent financial advisers, the commission removal business is fraught with difficulty. The last thing some of these groups want to do at the moment is upset advisers (any more). It’s also relatively easy for AMP to do as its advisers mostly sell risk products. AMP presented some pretty interesting research conducted by Colmar Brunton around consumer's attitude to advice and how advisers are paid. Clearly the research was designed to strengthen the case for fees as opposed to commissions. The take out points are around how much people are prepared to pay for advice, how advisers rate versus other professionals and the discovery most investors don't actually know how much they pay for advice. The key point pushed by Regan was that consumers think commission creates conflict. It's a message he made strongly. However the numbers aren't a massive vote for fees. Apparently 52% of consumers agreed that commissions introduce conflicts of interest and bias to the advice given. Currently commissions are the most common with 52% of investors with advisers using this approach. That leaves 42% on fee for service. The research, and the message, was clearly around the idea that commissions create conflicts of interest and bias. But when asked if AMP would remove commissions from life insurance products the answer was an unequivocal no. Talk about a bob each way.
« TOWER's bid anything but friendlyOnePath to the bank door »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 ▼2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼3.15 3.29 ▼3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 5.50 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.55 2.65 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac ▼3.39 3.45 ▼2.99 ▼3.35
SBS Bank 4.54 3.09 3.19 3.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.59 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.99
The Co-operative Bank - Standard 4.40 3.05 3.19 3.49
TSB Bank 5.34 3.35 3.49 3.79
TSB Special 4.54 2.55 2.69 2.99
Wairarapa Building Society 4.99 3.65 3.69 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.12 3.19 3.17

Last updated: 4 August 2020 11:33am

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