About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Wednesday, November 22nd, 12:34PM
rss
Latest Headlines

Advisers tackle client-first question

A very useful session of industry commentators was held last week at a forum initiated by the IFA and PAA on the contentious subject of “putting the interests of the client first” versus “acting in the best interests of the client”, writes IFA chief executive Fred Dodds.

Friday, October 28th 2016, 5:59AM 1 Comment

Fred Dodds

As you would expect, there was a range of views expressed. But by the end of the discussion it was agreed we had arrived at a reasonably common landing point.

There is no groundswell to change “putting the interests of the client first” as the paramount rule for the delivery of financial advice.

Other jurisdictions have different standards, but in a number of jurisdictions that have “best interests” as their headline standard, the concept is limited or watered down by other pieces of regulation e.g. Australia has legislated for best interests; however nowhere do they explain what best interests actually is – rather they provide a safe harbour of seven steps for an adviser to follow, and if they do, they will be deemed to have met the best interests duty.

The fact of the matter is that Government has determined to impose a statutory conduct obligation on the providers of financial advice to place the interests of the consumer first. That is to be the standard for all advisers, not just AFAs.

There was widespread support for the latest iteration of the Code of Professional Conduct for AFAs, with the new Code Standards 8 and 9 providing a useful basis for the statutory obligation.

The critical issue is to ensure there is clarity as to what “putting the interests of the client first” means in practice.

It was felt that more work is required in relation to the status and regulation of other people who are not financial advisers in terms of the Act, but who nonetheless assist consumers with financial decisions.

This would cover points such as:

• What health warnings should be required around any restrictions on advice?
• How would conflicts of interest be best managed, particularly when obligations can be required in multiple directions such as to customers, employers and shareholders?
• Should some advisers be using a label of “agent” or “salesperson” rather than adviser?

What was also agreed was that consumer access to professional advice is critical. The duty chosen and the way that it is interpreted and applied in practice must be positive for making advice more accessible in New Zealand.

IFA and PAA look forward to working with the industry and officials to bring this into reality for the benefit of consumers.

Tags: client first IFA PAA

« How the west was(n't) wonRobo not just for investment »

Special Offers

Comments from our readers

On 28 October 2016 at 9:43 pm w k said:
1) isn't acting in the best interests of clients putting clients' interests first? or putting clients' interests first acting in the best interests of clients?

2) agent, salesman, adviser or consultant, etc. do you honestly think customers care? i don't as a consumer but i expect anyone selling a product to be competent enough to sell it. don't just talk and imagining things, go to the street and ask the consumers what they think!!!

i smell somebody (i think many bodies) instead of having to make things crystal clear is trying to confuse things to churn extra biz or hold on to the job for as long as possible.

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • FMA pushes net returns over fees debate
    “Brent, You have said in the past you think that large pension funds are the best at investment decision-making. So...”
    7 hours ago by doomben
  • FMA pushes net returns over fees debate
    “I definitely agree with Brent here, and to quote one of my Morningstar colleagues believe the data "presents a false relationship...”
    8 hours ago by cdouglas
  • FMA pushes net returns over fees debate
    “Net performance over a short period of 10 years will throw up all sorts of nonsensical results. It does reinforce a chase...”
    12 hours ago by Steven Popodopolus
  • Stop filling out forms for clients: IFSO
    “Totally agree and especially applies to health declarations, as well as financial statements. Advisers can never presume...”
    13 hours ago by Referee
  • FMA pushes net returns over fees debate
    “Hi Doomben It seems silly to me for the following reasons: Firstly, your “burn client money” example is a classic...”
    13 hours ago by Brent Sheather
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
ANZ 5.79 ▼4.95 ▼5.15 5.49
ANZ Special - ▼4.45 ▼4.65 4.99
ASB Bank 5.80 4.75 4.99 5.29
ASB Bank Special - 4.39 4.69 4.99
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.59 4.69 4.99
BNZ - Std, FlyBuys 5.90 4.99 5.29 5.59
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.45 5.50 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 5.00 5.20 -
Housing NZ Corp 5.79 4.75 4.99 5.29
HSBC Premier 5.79 4.19 4.29 4.89
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.95 5.15 5.49
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.55 4.65 4.99
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special 5.00 - 4.75 -
SBS Bank 5.89 4.99 5.19 5.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.59 4.69 4.99
Sovereign 5.90 4.75 4.99 5.29
Sovereign Special - 4.39 4.69 4.99
The Co-operative Bank - Owner Occ 5.75 4.55 4.69 4.99
The Co-operative Bank - Standard 5.75 5.05 5.19 5.49
TSB Bank 5.80 4.80 5.15 5.45
TSB Special - 4.55 4.69 4.79
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.99 5.19 5.44
Westpac - Capped rates - 5.26 5.36 -
Westpac - Offset 5.95 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 4.59 4.69 4.94
Median 5.82 4.78 4.99 5.29

Last updated: 15 November 2017 9:40am

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

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