by Susan Edmunds
The Ministry of Business, Innovation and Employment (MBIE) is considering submissions received in response to a discussion paper on disclosure requirements for financial advice.
These will come into force with the new advice regime, which will introduce a level playing field for all financial advisers. At present, only AFAs have disclosure requirements.
MBIE suggested that advisers tell their clients what commission they received - and asked whether that should be done in dollar terms.
Partners Life managing director Naomi Ballantyne said it would put pressure on advisers who tried to obscure what they were paid. But she said it was a good conversation to have with clients, anyway.
Sometimes the insurer that paid the highest commission would also be the one that would have the best-priced policies or the best claims processes for clients, she said.
If an adviser could not demonstrate the policy was the best one for the client, as well as paying the highest commission, then the adviser was probably not giving good advice, anyway.
Graeme Edwards, executive general manager at AIA, said he had been told by AFAs that their clients had no problem with their fees and charges, when they were explained to them.
"Clients didn't have an issue with it because they have that trusted relationship. You go to lawyers, all the other professions and you don't tend to go into a big discussion about their fees ... good advisers have that trust."
If a client changed their minds based on disclosure of fees or commission that would indicate a problem with that relationship.
Other professions also paid commissions and offered incentives, he said. Their impact on advice was sometimes exaggerated, he said.
"I don't see this affecting the vast majority of advisers who do a good job and have that relationship."
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