tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Tuesday, July 7th, 7:53AM

News

rss
Latest Headlines

Conduct bill will mean changes for advisers: MBIE

New conduct regulations for financial institutions will cause a limited reduction in access to financial advice because a ban or cap on commission has not been recommended, the Ministry of Business, Innovation and Employment says.

Monday, January 27th 2020, 3:59PM

The Conduct of Financial Institutions bill is expected to have its first reading soon after Parliament reconvenes for the new year in a fortnight.

The bill introduces new conduct obligations for banks, insurers and non-bank deposit takers.

A regulatory impact statement said it was likely to mean a large increase in costs for the Financial Markets Authority through administration and monitoring work.

One of the potential unintended impacts of the bill was the possibility of less access to advice, the statement said, but that was seen as moderate to low because “the most intrusive regulatory options” had not been recommended, which meant there was less risk of wholesale changes to business models and cash flows, MBIE said.

But that does not mean that adviser models will be left alone.

The bill requires that banks, insurers and non-bank deposit-takers meet obligations in relation to how they design their incentives for staff and advisers.

That would mean understanding the risk of mis-sale they created and working to reduce that risk.

MBIE noted that could mean a reduction in upfront life insurance commissions.

In its current form, the bill would also stop financial institutions offering volume-based sales incentives or remuneration.

The regulatory statement said while FSLAA contained a conflict of interest duty, it focused on managing conflicts, not reducing them.

“Product manufacturers are free to create incentives for financial advisers (whether intermediaries or “in-house”) to prioritise their own interest."

Non-regulatory options were unlikely to lead to enduring positive changes in the sector, MBIE said.

“The characteristics of financial products and services mean that some underlying issues such as information asymmetry, conflicts of interest and an imbalance of power exist. Conduct and culture problems in the industry mean that institutions may not take these underlying characteristics into account or are able to take advantage of them.”

MBIE noted that there were signs change was not happening as regulators might wish.

“While some life insurers are making positive changes (for example by amending their adviser agreements with a revised set of obligations to enable more effective oversight) we have also seen an example of a life insurer reassuring its advisers that they do not need to be concerned about changes to either commissions or adviser agreements in the next 12 months, unless required by law or regulation. Overall, in the life insurance sector there has been little movement in the levels of high upfront commissions, and sales incentives based on value/volume being retained.”

Tags: CoFI conduct MoBIE

« InvestNow considers build-your-own KiwiSaver schemeCommissioner: Pension age shouldn't increase »

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

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.19 3.19 3.49
AIA Special - 2.69 2.69 2.99
ANZ 4.44 3.15 3.25 3.85
ANZ Special - 2.65 2.75 3.35
ASB Bank 4.45 3.19 3.19 3.49
ASB Bank Special - 2.69 2.69 2.99
Bluestone 4.44 4.44 4.44 4.44
BNZ - Classic - 2.65 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.25 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union South 5.65 4.75 4.75 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.60 2.65 2.80
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 3.99 2.58 2.68 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.40 3.54 4.00
Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.49 3.45 3.39 3.69
SBS Bank 4.54 3.29 3.19 3.49
SBS Bank Special - 2.79 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 2.79 2.79 3.39
The Co-operative Bank - Standard 4.40 3.29 3.29 3.89
TSB Bank 5.34 3.59 3.49 3.79
TSB Special 4.54 ▼2.65 2.69 2.99
Wairarapa Building Society 4.99 3.75 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.65 2.69 2.79
Median 4.55 3.22 3.22 3.44

Last updated: 3 July 2020 8:15am

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