NZFSG cans awards

The country's largest dealer group, NZ Financial Services Group, has canned its awards as it doesn't want the wrath of the regulator.

Friday, March 27th 2020, 4:05PM

Brendon Smith

NZFSG traditionally hands out awards to its advisers and groups based on volumes of business written. However, the recent roadshow was awardless.

It says it put the awards on the table with regulators, "but we sort of got the sense that this is not a good look," NZFSG chief executive Brendon Smith said at the group's recent roadshow.

The question from the Financial Markets Authority was how do volume based awards fit with best customer outcomes?

Smith said NZFSG didn't want to test the waters with the FMA and was conscious of the reputational risk to the group.

"We would have liked to continue this," he said.

NZFSG was looking at how it can acknowledge its members on a best customer outcome basis.

The move echoes what Partners Life is doing in the life insurance space. Last week it announced it was paying override commission to the financial advice provider from where advice was given, rather than to dealer groups.

Its new FAPOverride would also be paid on the basis of good customer outcomes. The company has identified six areas to measure customer outcomes and these would be used to determine override commission.