Commission review for insurance sector welcomed

MEDIA RELEASE

30 January 2019

Financial Advice New Zealand, the largest financial adviser membership organisation in the country, welcomes the FMA and RBNZ Report | Life Insurer Conduct and Culture.

“We believe in transparency for the sector therefore support an industry review of the life insurance sector.” says Katrina Shanks, CEO Financial Advice New Zealand.

“A focus of this report and subsequently the cabinet meeting this week has been the remuneration structure of commissions. Existing remuneration structures have been in place for a long time, so it is relevant that the industry review models in view of current and future goals: specifically, the pursuit of a New Zealand where more Kiwis benefit from quality advice – a goal which is only achievable through consistently focusing on what is best for consumers.”

Shanks comments that it is essential that the insurance sector respond swiftly.

“This is a complex issue which could pose real risk for New Zealanders access to quality financial advice. The last thing anyone wants – including the regulator – is the dismantling of the insurance advice community. As the FMA and RBNZ report highlighted in its comment on product suitability, quality advice significantly contributes to the financial well-being of New Zealanders.”

“We must – collectively as a sector – review commission models to ensure they support good outcomes for Kiwis, as well as ensuring any changes to remuneration supports the continuation of the insurance advice sector and access to quality advice for New Zealanders.”

Financial Advice New Zealand will seek views from its membership, insurance providers, consumer bodies and of course regulatory bodies, and will present it recommendations leading up to the Consultation Process in May this year, announced by Hon. Kris Faafoi on 29 January 2019.

“We welcome the opportunity for a transparent review. The current discussion regarding insurance commissions have hampered the public perception of quality advice, and have no doubt dissuaded some Kiwis from accessing the skill and knowledge of a quality adviser. As well as ensuring commissions are relevant and consumer focused, we see this review as opportunity to foster better understanding of what quality advice is, and help more New Zealanders access and benefit from this valuable service,” says Shanks.

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