About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Monday, July 22nd, 6:03PM
rss
Latest Headlines

Conduct, consumers, advisers, and insurers

What links these forces?

Monday, October 29th 2018, 11:44AM

Russell Hutchinson

With all the talk about potential change in the advice industry, the announced changes in the provision of financial product have been far the greater.

The challenging questions being asked around conduct, consultation on further law changes, that could result in a new regulator – or at the very least, new powers for an existing regulator.

Follow that up with the news about AMP, added to the sale of OnePath, and before that the sale of Sovereign, and you have an incredible passage of change. It all affects the provision of advice, and the future for advice.

There is a debate going on between regulators and insurers about what constitutes good conduct. There is some blurring of the lines between product provision and advice provision in this discussion.

Insurers are being asked how they ensure that clients receiving their products as a part of your advice consultations are receiving good advice. Regulators are worried that through commission payments insurers’ own conflicts make could affect advice recommendations for their product.

That is worth testing, of course, as events in Australia underline.

The discussion is important to you too, however, as there is a risk of an unintended outcome: the loss of independence in advice. That could occur if insurers become responsible for too much of the advice process, and the scope for innovation, difference, and freedom to advise in different ways is reduced.

I think that there is plenty of room to work on good conduct outcomes without compromising your freedom to advise, but this is a discussion you may have a view on.

The areas you might take an interest in the overlaps between, say, Financial Advice Code and insurer conduct include:

  • Commissions and incentives
  • Protections for vulnerable clients
  • Affordability and eligibility issues
  • Helping clients to understand the value of different products
  • Services provided for fees received

There are probably more.

In the midst of all that, corporate decision-making is re-shaping the face of insurance advice provision for 2019 and beyond. Three of the largest names in the insurance industry have changed.

The loss of AMP’s life offer to the New Zealand market is one which I find particularly saddening. AMP was number one in this market when I started work here.

To think it will close to new business shows that no-one is insulated from the forces of market change. Recent events, perhaps the Australian Royal Commission, may be cited as contributing factors.

It is probably more important to name the long-running consumer themes – the relentless shifts occurring in health, wealth, consumerism, awareness, and changes towards more living benefits.

These are really the cause of most of the change we see in the market. Whenever we see a big change for someone else, the big question is ‘what changes should I be making?’

Tags: Russell Hutchinson

« How much trauma cover?Can you comply with the new Code? »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

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
  • (The Wrap] The anatomy of the AMP shambles
    “It is terrible and for years watching AMP management felt they knew better than the rest of the industry. They are myopic...”
    3 hours ago by Backstage
  • (The Wrap] The anatomy of the AMP shambles
    “Ralph and the AXA crew knew something about customers and advisers - shareholders must wish they had been kept on. Shareholders...”
    4 hours ago by fiona c
  • AMP loses fight over KiwiSaver ad
    “Well done all three of you. A great outcome for common sense - there hasn't been a lot of evidence in recent times that there...”
    19 hours ago by Robert Oddy
  • (The Wrap] The anatomy of the AMP shambles
    “Agree with Doggy, I liken the running of AMP to that of an elephant trying to turn. The saying what goes around comes around...”
    19 hours ago by Tony Palamidas
  • (The Wrap] The anatomy of the AMP shambles
    “A great insight Phil - which many industry folks have been following for a while. To add to this: . I suspect that the...”
    21 hours ago by Pragmatic
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE 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