|        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Thursday, May 6th, 1:28PM


Latest Headlines

Adviser complaints increase, IFSO says

A family who complained that a financial adviser was wrong to reduce his client’s life insurance cover on his instructions has had their complaint rejected by the Insurance and Financial Services Ombudsman.

Tuesday, September 15th 2020, 9:45PM

In June 2019, the man, who had been in hospital for 10 weeks, told his adviser he wanted to reduce his cover from $268,000 to $100,000 because the premiums were too high.

The adviser said he should wait for a diagnosis and discuss it with his wife.

The man wanted to proceed so the adviser asked the couple to both sign the request. He then sent the request to the insurer.

A month later, the client told the adviser he wanted to cancel the policy. The adviser recommended against it and did not proceed with the request.

Another month later the client’s health deteriorated and a claim was made for early payment of life cover.

He died the next month and the insurer paid his estate $100,000.

The estate complained saying the adviser and insurer breached their duties of care to safeguard the client and his wife from financial loss.

The IFSO case manager said insurers had a duty to ensure vulnerable customers were not financially disadvantaged but the information about his deteriorating condition was not provided to the adviser or insurer.

The adviser had done what he could to alert the family without breaching privacy.

The complaint was not upheld.

It was one of 3,922 inquiries and 282 complaints dealt with by the scheme last year. About two-thirds related to general insurance. Just 4% were about financial advisers, or 12 complaints.

The most common financial adviser issues were misselling, standard of service, misrepresentation, fees and charges. The number of financial adviser complaints investigated increased year on year.

Karen Stevens, Insurance and Financial Services Ombudsman, said the focus on improving conduct and culture in the financial services sector might be helping to improve complaint management. “Only by listening to the consumer voice and responding with the correct information at the right time will complaints be managed effectively.

“We are noticing the complaints we refer back to insurers on behalf of complainants are being resolved more quickly and settled more often, which is a good sign in terms of the customer experience.”

In another case that was not upheld, a woman had a phone conversation with her adviser about reducing her life insurance cover to $15,000 to make her premiums more affordable.

The adviser sent her a letter with an amendment form for her to sign and an explanation that the premiums would increase at the next policy anniversary in November 2019.

When she received the letter, she made a complaint, because she said the adviser had told her during their telephone conversation that the premiums would not increase for two years.

The adviser denied telling her that; he said that he told her he could review the premiums again in November, when they increased.

The case manager explained the IFSO Scheme was unable to assess credibility and must rely on the documentary evidence to decide what happened. When parties presented conflicting oral evidence, the IFSO Scheme might not be able to establish what happened if there was no documentary evidence to assist.

There was no telephone recording available to help the case manager to decide what happened and the only documentary evidence was the letter, saying that the premiums would increase in November 2019. The case manager was unable to resolve the issue about what was said.

Tags: complaints IFSO insurance

« Asteron Life: One fifth of SMEs don’t know where to find an adviserSouthern Cross posts surplus after returning $50m to members »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment



Printable version  


Email to a friend
Insurance Briefs

Tower builds partnerships with CSC and Sentro
Tower Insurance has continued its partnership push announcing it has formed new relationships with CSC Buying Group and InsurTech start-up Sentro.

nib Little Legends $10k Relay gives junior players a healthy funding boost
The nib Little Legends $10k relay, held during half-time at the Blues vs Chiefs match on Saturday, was won by the Pakuranga United Rugby Club.

nib helps protect future rugby stars
nib New Zealand has partnered with the Auckland Blues Super Rugby Aotearoa team to launch its nib Little Legends Little Smiles initiative, giving 1000 junior rugby players OPRO custom-fitted mouthguards – the same ones worn by the professionals.

Insurance professionals get time to shine
The Australian and New Zealand Institute of Insurance and Finance (ANZIIF) has launched an initiative aimed at showcasing the success of insurance professionals.

News Bites
Latest Comments
  • Orr and Shaw headline Mindful Money awards and conference
    “I presume that Generate and Mint (as sponsors) and Devon or any other supporters would be deemed ineligible to enter any...”
    23 minutes ago by Rachelle Bland
  • The death of the single adviser FAP
    “Rubbish. Financial advice is (& will always be) a cottage industry. Whilst the industry is currently buckling under the...”
    1 hour ago by Pragmatic
  • The death of the single adviser FAP
    “Since the release of transitional license statistics earlier, I've expressed the view on various platforms that the number...”
    4 hours ago by dcwhyte
  • The death of the single adviser FAP
    “I totally agree with Tony, there will be a period in 2022, where the knowledge of the changes in the financial advice becomes...”
    4 hours ago by Elephant1
  • Why PI insurance premiums are rising
    “Why do the PI insurers/underwriters not share their apalling NZ claims statistics with the industry? (20-40% price increases...”
    8 hours ago by Tony Vidler
Subscribe Now

Cover Notes - Specific news aimed at risk advisers

Previous News
Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
Site by Web Developer and