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: Sunday, July 12th, 9:48PM

News

rss
Latest Headlines

Commissions report gets no traction with MBIE

[UPDATED] The contentious Melville Jessup Weaver report into insurance adviser remuneration structures might have been an expensive waste of money.

Wednesday, November 25th 2015, 1:51PM

by Susan Edmunds

The report, commissioned by the Financial Services Council and released on Monday, was intended to form part of the discussion of the review of the Financial Advisers Act, which is under way.

It was highly critical of upfront commission rates, which it said were driving poor consumer outcomes and adding unnecessary cost to the insurance industry.

But it was released just days before the options paper for the review, which all but ruled out any such changes to commission structures.

The paper says certain conflicts of interest, such as commission payments, may be leading to poor outcomes for customers because the current regime does not require all advisers to manage or disclose their conflicts.

The paper says one option to tackle the problem is to ban or restrict conflicted remuneration, including commission and  volume-based incentives from product providers.

But this is not a preferred option. Such a move could limit access to advice to those who are not willing to, or cannot afford to, pay upfront for advice, the report said.

"Relative to a broad ethical obligation, it can be difficult to design a ban or restriction without the possibility of advisers finding a loophole in the requirements."

A Ministry of Business, Innovation and Employment spokesperson said: “Banning or restricting commissions is not MBIE’s current preferred option. However, we are seeking feedback on the effectiveness and impacts of this versus other options to manage conflicts of interest. Other options include an ethical obligation to put the consumer’s interest first, together with clearer and more consistent disclosure of conflicted remuneration.”

Instead, in all of the three options of packages of suggested changes, which range from minor changes to large-scale alterations to the law, the options paper says all advisers should provide simple and common disclosure to clients.

That would mean clients being made aware that their adviser was receiving commission for the sale.

FSC boss Peter Neilson said the indication that changing commission was not a preferred option was not a surprise. But he said there were other questions that related to the issue of conflicts of interest that needed to be resolved.

MBIE said: "The findings and recommendations in the MJW report will be considered along with all other feedback that we have received. It is important to get feedback from as many stakeholders as possible."

Tags: Financial Advisers Act

« A blunt instrument in the wrong hands: PAACameron: MJW made little difference to FAA options »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Harking back to the old days
    “Tactical move by CIGNA and looks like they have a lot of bench strength now in sales, underwriting and product / pricing...”
    2 days ago by hitting rock
  • Greens want ACC extended to cover sickness
    “Never happen. The Greens are such an aspirational bunch. Must all the weed. They 'want' all sorts of unlikely things...”
    2 days ago by All hat no cattle
  • Harking back to the old days
    “Really positive news. NZ has been blessed by many successful leaders and it is good that their skills can skill be utilised...”
    3 days ago by Francis L
  • Harking back to the old days
    “I dare say Cigna just got that extra grunt it's been looking for....”
    3 days ago by Matron
  • Greens want ACC extended to cover sickness
    “The Greens have no idea The purpose of the Woodhouse report was to remove the "at fault" component of accidents Sickness...”
    3 days ago by LNF
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.19 3.19 3.49
AIA Special - 2.69 2.69 2.99
ANZ 4.44 3.15 3.25 ▼3.39
ANZ Special - ▼2.55 ▼2.69 ▼2.79
ASB Bank 4.45 3.19 3.19 3.49
ASB Bank Special - 2.69 2.69 2.99
Bluestone 4.44 4.44 4.44 4.44
BNZ - Classic - 2.65 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.25 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
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 4.75 4.75 -
Credit Union South 5.65 4.75 4.75 -
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 2.60 2.65 2.80
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 3.99 2.58 2.68 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.40 3.54 4.00
Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.49 3.45 3.39 3.69
SBS Bank 4.54 3.29 3.19 3.49
SBS Bank Special - 2.79 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 ▼2.69 ▼2.75 ▼2.99
The Co-operative Bank - Standard 4.40 ▼3.19 ▼3.25 ▼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 3.75 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.55 2.69 2.79
Median 4.55 3.19 3.22 3.39

Last updated: 10 July 2020 9:02am

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