About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Thursday, July 18th, 7:09PM
Latest Headlines

Disclosure consultation and commission

Incentive trips are not, it turns out, the sole preserve of insurance advisers.

Wednesday, May 16th 2018, 10:00AM

by Russell Hutchinson

You might be surprised to know that the otherwise quiet and staid world of accounting also enjoys incentive travel – and it wasn’t disclosed to me either, in any of my recent dealings with my accountant.

The travel was awarded by a software provider to the accounting firm. I do not know how this is linked to the promotion of the software company’s online platform for accounts, but I do know that they probably didn’t award any trips to accountants that didn’t promote their software, or preferred to promote the software of one of their competitors.

But I don’t care.

I considered the software subscription to be a reasonable cost and paid it. I know that people get paid commissions, fees, and sometimes get taken out to lunch, or even shouted overseas trips. It’s business, and business does these things.

There is a famous witness stand speech in the movie “A few good men”, which has become a sales meme. If you haven’t already googled it, do so.

But I’m also not arguing against proposed new disclosure rules – I quite like them - this is about change.

Times change, and both consumers and the products and services they are sold are far more sophisticated these days than they once were.

In the 1950s you were doing well to have a reliable car. Today, consumers are concerned about carbon use, the possible inequity of bargaining approaches in dealerships, and the treatment of workers all the way through the value chain. Or they are worried about whether the engine was hand-built, the leather is full grain, and which parts are magnesium-alloy. Details count, far more than they used to.

There is a long-running consumer trend that demands more information about products, and how they are made, and who gains from that, and so on. As the recent MBIE consultation document on disclosure made clear, we should make clear to consumers, what we make from them, and who makes it. It is time to embrace change and improve disclosure.

But it is also worth remembering that the sky, probably, won’t fall in.

Consumers are also far more accepting of the fact that you need to make money. At the start of the review of the Financial Advisers Act MBIE also published some consumer research that shows consumers are generally well aware of commissions, and quite like them as an approach for paying for services. Which is why MBIE and our legislators rejected the idea of banning commissions (see second reference below, end of the report ‘Options considered but rejected’).

Who knows, maybe my accountant will improve their disclosure too, and probably last of all, doctors might catch up.

Submissions on the draft disclosure regulations close at 5pm on Friday 25 May. A couple of useful reference links are included below. If you want to have your say, click on the first link below.


Have your say: Consultation on disclosure requirements

Final report: Review of the operation of the Financial Advisers Act 2008 and the Financial Service Providers (Registration and Dispute Resolution) Act 2008

Tags: Disclosure MoBIE

« Scope versus adviceQuestions of Conduct: when does good conduct become financial advice? »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment



Printable version  


Email to a friend
Insurance Briefs

Future actuary rewarded

nib expands First Choice network
nib has announced an expansion of its First Choice network, which the health insurer says has delivered more than $1 million in claims savings in the first year of operation.

Fidelity Life team up for award
Fidelity Life chief technology Officer Dan Wilkinson and his team have been named as a finalist in the Best ICT Team Culture category at the 2019 New Zealand CIO Awards.

Cigna to support kids' mental health
Cigna New Zealand and Life Education have partnered to develop Small Changes Whānau Challenge, a new take-home resource that will support classroom learning about kids’ mental health and wellbeing.

News Bites
Latest Comments
  • Pathfinder-backed KiwiSaver to target gender diversity
    “This is a great initiative by Pathfinder - congratulations on taking a risk, and standing up for something that you believe...”
    16 hours ago by Pragmatic
  • Call to ensure efficient advice licensing
    “@all Put your cheque books away - no need to pay the lawyers to do the research to provide an opinion...... In my old...”
    1 day ago by Murray Weatherston
  • Call to ensure efficient advice licensing
    “Further reading - Kinsington Swan in February 2018 https://www.kensingtonswan.com/news-updates-and-events/financial-advice-reforms-insights-series-14-penalties-enforcement-complaints-and-disciplinary-matters/...”
    2 days ago by all hat, no cattle
  • Call to ensure efficient advice licensing
    “MPT and Murray this might help https://www.fma.govt.nz/assets/Fact-sheets/Who-will-need-a-licence-to-provide-financial-advice...”
    2 days ago by all hat, no cattle
  • Call to ensure efficient advice licensing
    “Thanks Murray, it seems we are on the same page. Be great if the regulators could confirm or not. AHNC, I agree I dont...”
    2 days ago by MPT Heretic
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News


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