Financial Advice New Zealand has said the insurance sector must respond swiftly to the issues raised in the recently released FMA and RBNZ Report into Life Insurer Conduct and Culture.
Referring to the focus on the remuneration structure of commissions, Financial Advice NZ CEO, Katrina Shanks, says it’s important existing remuneration structures are reviewed while ensuring that a future where more Kiwis benefit from quality advice is not lost sight of.
“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,” said Shanks.
“The last thing anyone wants – including the regulator – is the dismantling of the insurance advice community.”
“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.”
The association confirmed it will seek views from its membership, insurance providers, consumer bodies and regulatory bodies and will present its recommendations leading up to the Consultation Process in May this year.
“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,” said Shanks.
Further, Financial Advice NZ has announced it will be rolling out a series of workbooks to its members to help advisers prepare for the new licensing regime and build their evidence to back up their license application.
The first workbook is set to be released this month, including examples of what are good advice outcomes for the client and what are not, along with templates and resources.
Financial Advice NZ Learning and Development Manager, Andrew Gunn, says that the association is looking at the personal obligations that advisers and nominated representations will have from mid-2020, focussing on small advice businesses.
“Because under licensing, the FMA will be looking at how do you evidence your personal obligations,” he said.
The workbooks will help advisers work through three areas:
- Key duties under the law
- Standards under the code
- Regulations under disclosure documents
The association is also intending to host a series of one-day workshops around the country called ‘Navigating Level 5’ (click here).
“It’s for that huge cohort of people who have been in the business for 10, 15 or 20 years and for whom it could be a bit of shock trying to get back into formal learning,” said Gunn.