Sue Chetwin
Consumer NZ chief executive Sue Chetwin and Tower chairman Michael Stiassny have been appointed to the FMA board.
“Sue’s considerable experience as a consumer advocate and journalist will bring a strong consumer perspective to the FMA, and one that is independent from the industry. She is currently the chief executive of Consumer NZ, holds governance roles with consumer-focussed organisations, and worked as a journalist for more than 25 years,” Commerce Minister Kris Faafoi said.
“The combination of her skills and experience will be highly beneficial to the FMA, particularly as its mandate evolves to encompass more consumer-focussed regulation.
In Chetwin's time at Consumer NZ she has strongly advocated against commission payments, particularly for life insurance.
Earlier this year she was quoted as saying: "Commission-based selling comes with a huge risk the broker will put their earnings ahead of what's right for their customer."
"The results of our research suggest selling insurance this way is leading to poorer outcomes for consumers."
Stiassny has a colourful career including some controversial directorships and handling many company insolvencies.
“Michael Stiassny’s wealth of governance and professional experience will also provide considerable value to the FMA." the minister said in a release.
“Michael is an experienced director who has held a number of public and private directorships for many years, and specialises in strategic advice and dispute resolution. Before moving into leadership and governance roles, he worked as a senior corporate governance and insolvency practitioner.”
Both appointments are for three-year terms.
Stiassny was previously chairman of Vector and NZTA.
Chetwin is also a director of the Banking Ombudsman Scheme.
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Yes, we can all agree that there have been cases where commission drivers have been a problem, but this is individuals and they have neither lasted very long nor have they been systemic in consumer harm.
When we look at claim issues where the claim wasn't paid at 4-7% of claims, while this number seems to be high it comes back to two reasons.
The claim expected was not provisioned under the policy, or the client didn't disclose what was required. Neither has any direct link to commission, as the advice from other forms of distribution have the exact same issues.
I'm still yet to hear why a bank provided a limited trauma cover to a client vs a comprehensive one.
The later was 8% more expensive or alternatively would have paid $92,000 vs $100,000 on the basic product, yet the client could claim the comprehensive product but not on the essential one. Commission had 0 impact on this transaction. It was the quality of the advice, understanding of the client, but more importantly the process around this that let it happen, not the commission.
Sue has had a long held view that advisers are bad and commission is evil, I hope that the board is clear in her skewed and biased motives when listening to her view. Because it is not one that is healthy for the advice market,
It's not how we’re paid that matters it's how we advise, and client's with choice on how we are remunerated consistently choose commission.
Consumers latest survey released to members was interesting to review, given the focus on the adviser aspects were about commission disclosure and how many times an adviser had suggested change, yet for the other distribution models no questions about incentives for sale or the number of times a client has been asked to change. So there's going to be no surprise to see more adviser bashing coming from consumer with their next report.
There is a clear bias against advisers and advice, and we advisers know clients come to us for advice because they want a professional opinion, well mine do.
So while the political optics in this will look good externally, it is likely we will see the stifling impact from this appointment that directly impacts consumers in ways that are completely unintended, lower quality advice and poorer client outcomes.
The unfortunate reality is we have very little input as practicing advisers in the governance of our industry.
Outside the FSLAA and the Code the rest of the changes happening feel a lot like being a mushroom.