The percentage of AFAs who said they received ‘soft commissions’ continues to fall, according to the Financial Markets Authority’s (FMA) latest statistical snapshot on AFAs in New Zealand.
The report found that commission and bonus based remuneration are still the most common revenue streams for AFAs, however, over a third of customers paid a fixed fee or an hourly rate, over the 12 month period ending 30 June 2017.
Close to 70% of AFAs provide Kiwisaver services and about 40% provide insurance.
QFE advisers were found to have provided advice about insurance policies to a greater percentage of clients although less of that advice related to insurance replacement products.
A fewer number of AFAs said they provided KiwiSaver advice and other category 1 products compared to the previous year.
According to the data, there were a total 1,800 AFAs in the industry, with 80 new entrants and 110 exiting over the 12 months.
Each year since 2015, the data has shown more than 90% of AFAs said they had no complaints recorded against them in the past 12 months.
Among AFAs in the industry:
- A third were highly experienced with 20+ years’ experience
- Most were aged between 36-65 years
- Nearly a quarter were female advisers
The majority (68%) were non-QFE and the percentage who were part of a QFE continue to fall.
The FMA requires AFAs to submit an annual information return each year, the data of which is used to provide a snapshot of the sector each year.