Insurers: Disclosure rules should help clients

Insurers are supportive of stricter disclosure requirements for financial advisers.

Thursday, March 22nd 2018, 6:00AM

by Susan Edmunds

The Ministry of Business, Innovation and Employment is developing proposals for what rules should apply to all financial advisers, when the Financial Services Legislation Amendment Bill rolls the regulation of financial advice into the Financial Markets Conduct Act.

The ministry has said that the rules will need to work in a range of advice situations.

At present, authorised financial advisers have clearly defined disclosure documents they must provide.

Registered financial advisers only have to disclose basic information such as which disputes resolution provider they are with.

It has been suggested that those who are currently RFAs may find they have to detail the commission they receive from such things as insurance products, under the new regime.

A spokesman for Fidelity Life said it would support a model where consumers’ interest were put first and “consumers are readily able to obtain independent financial advice through competent financial advisers who are held to a high standard of ethical behaviour”.

“We expect advisers who recommend our life insurance products to always put their customers’ interests first and that disclosure of any remuneration, including any incentives, as required by legislation should be clear and easy for their customers to understand,” he said.

“In our experience the vast majority of advisers are already taking a customer-first approach, and will not struggle with disclosing commissions.”

AIA's general manager of corporate services and general counsel Kristy Redfern said it, too, supported moves that put clients' interests first.

“We agree that disclosure requirements may need to be beefed up. Any changes should not significantly increase compliance costs, which has the potential to restrict people’s access to the advice they need. But changes should focus on ensuring that New Zealanders get the information they need to make good decisions.

“The test of any new disclosure requirements will be that they make the important things more apparent and more transparent, and that they give both clients and advisers confidence in their insurance.”

Tags: AIA Disclosure Fidelity Life Financial Services Legislation Amendment Bill