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Susan Edmunds
Susan Edmunds
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Broader disclosure needed for VIOs: SiFA

Friday 15th of June 2018

MBIE recently sought submissions on its suggestions for disclosure rules for financial advisers under the new regime. It suggested that all advisers should have to tell their clients upfront what they would charge in commissions – and asked whether that should be done in dollar terms.

It proposed, when the scope of advice was known, the adviser should disclose details regarding the nature and the scope of the financial advice that the individual or firm would provide, including the providers whose products they would consider, details of any particular material commissions or incentives that they, or their employer, might receive and details of any particular material conflicts of interest.

SiFA made a submission arguing that did not go far enough for big product providers.

“We believe that where an adviser for a VIO gives ‘advice’ to purchase the VIO’s own product (where VIO includes the lead firm and all its associates both upstream and downstream) then the adviser should have to disclose all the fees and charges that the VIO will be paid right up the vertical integration.”

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