About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Friday, May 24th, 10:30AM
rss
Latest Headlines

[The Wrap] How about a Code of Conduct for Institutions? What a novel idea

It's funny how things turn out. The Wrap didn't happen Friday as I had a funeral to attend and I was struggle to pick a theme from the week because there were so few working days. But our minister, Kris Faafoi, fixed all that Saturday releasing yet another options paper - this one on the topic I had been toying with: Good Conduct.

Saturday, April 27th 2019, 5:29PM

The paper is called Conduct of Institutions, (there's a link to it at the bottom of The Wrap). In a nutshell it is the government's response to the two enquiries the Financial Markets Authority and Reserve Bank undertook into bank and life insurance companies.

First the good news for insurance and mortgage advisers....the Minister is not planning to ban commissions. However, in his interview with NewsHub Nation he seems to be saying that he is keen on trail commissions as a why of ensuring customers receive on-going service.

Ironically the report leans on Australia's Royal Commission and one outcome of that was banning trail commissions, and here we have New Zealand going off in a different direction.

The Options Paper is all about this concept of "Good Conduct". The answer is this pretty simple. notion of put the customer at the centre of everything. No-one can argue with this. But the big question in my mind is: How the heck can a regulator enforce Good Conduct?

Anyone who has worked the advice world knows that advice is a mixture of science and art. Plus there is often multiple ways to address a client's needs. 

Strategi Institute executive director David Greenslade made a great comment in his Good Returns TV interview that we published this week. He said for years now we have talked about Best Practice. That phase has now been superceded by Good Conduct. 

You can watch the full interview here.

I totally get and understand that customers' interests have to be at the heart over everything. I did think there is a massive distinction between how an adviser operates and how financial institutions operate. Advisers are about building individual and enduring relationships with their clients. More and more we are seeing their role evolve along the lines of being coaches and mentors to their clients.

Institutions are much more around selling product rather than relationships. Granted there are some exceptions, but it's the concept of what is more important in this argument.

It struck me, when reading the Options Paper that MBIE were trying to write a Code of Conduct for institutions. Haven't we had the Code Working Group trying to do this now for years? 

One comment I hear almost every day is how everyone is getting frustrated that Minister Faafoi hasn't yet released the proposed Code which was submitted more than a month ago. The feeling is this is one of the things which is holding up the transition to the new Financial Services Legislation Amendment Act.

Then there is the great question; Who is going to pay for all this? The Options Paper has many mentions of the FMA being resourced to do all this Conduct monitoring. If that's going to happen then it needs a lot more money.

FMA chief executive Rob Everett has already said it doesn't have the resources to monitor all the advisers it's about to pick up under the FSLAA. It's likely to be heading off to the Government, cap in hand, asking from money to monitor all the FAPs which will be produced under the new law.

It's probably going to need more people too. Getting the money maybe the easy part of the equation.

Tags: Opinion

« Build your business with a trusted brandRevealed: How much it cost to develop the Code »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.69 4.39 4.45 4.55
ANZ Special - 3.89 3.95 4.05
ASB Bank 5.70 4.45 4.39 4.55
ASB Bank Special - 3.95 3.89 4.05
BNZ - Classic - 3.89 3.95 ▼3.89
BNZ - Mortgage One 6.40 - - -
BNZ - Rapid Repay 5.85 - - -
BNZ - Std, FlyBuys 5.80 4.69 4.59 4.79
BNZ - TotalMoney 5.80 - - -
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 5.20 5.25 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 ▼4.60 ▼4.75 -
Housing NZ Corp 5.80 4.69 4.49 4.45
HSBC Premier 5.89 3.99 3.99 4.39
HSBC Premier LVR > 80% - - - -
HSBC Special - 3.69 3.69 3.95
Lender Flt 1yr 2yr 3yr
ICBC 5.79 3.95 3.99 3.95
Kiwibank 5.80 4.80 4.94 4.84
Kiwibank - Capped - - - -
Kiwibank - Offset 5.65 - - -
Kiwibank Special - 4.05 3.99 4.09
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 4.89 4.99 -
Resimac 5.30 4.86 4.46 4.69
RESIMAC Special - - - -
SBS Bank 5.79 4.85 5.05 5.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 3.99 3.99 3.99
Sovereign 5.80 4.45 4.39 4.55
Sovereign Special - 3.95 3.89 4.05
The Co-operative Bank - Owner Occ 5.65 3.99 3.99 4.15
The Co-operative Bank - Standard 5.65 4.49 4.49 4.65
TSB Bank 5.69 4.55 4.49 4.65
TSB Special - 4.05 3.99 4.15
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.79 4.69 4.79 5.19
Westpac - Offset 5.79 - - -
Westpac Special - 3.89 3.95 3.95
Median 5.80 4.45 4.42 4.42

Last updated: 23 May 2019 12:07pm

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

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