|        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Thursday, October 1st, 9:48PM


Latest Headlines

Clients complain about churn

Advisers are dobbing in other advisers they suspect have been inappropriately replacing insurance policies.

Tuesday, November 1st 2016, 6:00AM

by Susan Edmunds

Susan Taylor

Financial Services Complaints Ltd (FSCL) has released its annual report, which shows complaints against insurers were the bulk of its work over the past year, at 58 out of 180 cases.

But chief executive Susan Taylor said a still small but growing number of complaints were about financial advisers who replaced life, trauma and health insurance.

“These complaints raise a question as to whether some financial advisers are acting in their client’s best interests, or their own.”

She said the Financial Markets Authority’s investigation into churn had probably put more attention on the subject.

“It is really important that consumers understand the potential risks of changing insurers, as the consequences of not being covered when you think you are can be disastrous.”

She said any media coverage of an issue such as this would cause a spike in complaints.

But she said it was not just the clients complaining. Sometimes it was from another insurance adviser who took over a client’s business and saw what had happened previously and encouraged the client to complain, she said.

“It’s only a very, very small proportion of the adviser industry considering the number of advisers against the number of complaints, it’s very low. It tends to be a few unfortunately who may have given unsatisfactory advice and that tends to tarnish others with a bad name.”

To help financial advisers avoid complaints, FSCL is calling for them to provide their clients with a comprehensive written statement when advising on replacement insurance cover, including the specific reasons for the proposed replacement, the key differences between the existing policy and the new recommended policy, the client’s duty of disclosure and the consequences of non-disclosure, clear and full disclosure of fees or commissions and how the replacement policy will be implemented.

Taylor said there had been more churn complaints since the FSCL reporting period ended in June, and she expected more were to come.

FSCL’s annual report shows it handled over 3600 consumer enquiries and complaints about financial service providers to the end of June 2016, up 40% on the previous year, and formally investigated 178 cases, a 10% drop.

Taylor said awareness of its service – and that of other dispute resolution schemes in the sector – remained worryingly low and continued to be a focus area for FSCL.

“Of course, the best way for a consumer to find out about FSCL is for their financial service provider to tell them about us when they make a complaint, which we encourage our participants to do. It is also important that financial service providers recognise when a complaint has been made and that complaints are taken seriously.”

Tags: Churn FSCL

« Kiwi company attracts $200 million global investmentFSC members want to see advisers' value highlighted »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment



Printable version  


Email to a friend
Insurance Briefs

AIA reveals grant winners
AIA has revealed the financial advisers and advice businesses that will be given financial backing for their community initiatives.

Insurer nib backs Ronald McDonald House with $20k investment
Health insurer nib New Zealand and its nib foundation have lent support to Ronald McDonald House Charities.

Less stressed during lockdown
New Zealander’s health and wellbeing had surprising benefits from the Covid-19 lockdown.

Southern Cross supports new safe haven for at-risk pets
Southern Cross Pet Insurance has teamed up with Pet Refuge to provide temporary shelter for animals affected by family violence.

News Bites
Latest Comments
Subscribe Now

Cover Notes - Specific news aimed at risk advisers

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