Ballantyne responds to FMA churn report

Having reviewed the FMA report into replacement business only in the adviser channel, Partners Life is very pleased to note the very small number of advisers who have been identified as potential issues in respect of their practices around replacement business.

This is certainly in keeping with our experience of adviser behaviour i.e. that the vast majority take their moral obligations to their clients very seriously irrespective of any regulatory obligations.

We are interested to note that in the small group singled out for closer scrutiny, RFAs were not disproportionately represented compared with AFAs suggesting it is individual morals, rather than any regulatory standard or level of qualification, which drives poor customer behaviours.

As virtually all RFAs and AFAs receive commissions and can qualify for incentives for the sale of risk protection products following their advice process, and only a small number have been identified as having poor practices in respect of replacement business, it is also clear to Partners Life that commissions and incentives are not the cause of poor practices, rather individual morals are.