Loading ...A majority of advisers, it seems, believe the FMA has no cause to be concerned about soft commissions in the life insurance sector, although a sizable minority think otherwise.
As we go to press seven in 10 advisers (70%) indicated in our latest poll that they do not think that the FMA is right to be concerned about soft commissions, specifically in the life insurance sector.
But nearly a quarter (24%) do see cause for concern across the life insurance market while another 6% are not sure.
Our latest poll question follows the FMA publishing the findings of its engagement with insurers on how they manage their customers’ interests during periods of short term sales campaigns and soft commission incentives.
While the FMA was addressing insurance in general, we were interested to see if advisers felt the FMA’s concern was justified with regards just to the life insurance market.
…The regulator wrote to insurers last year after observing some insurers offering benefits and campaigns designed to drive business coming from third parties such as financial advisers…
As we reported, the regulator wrote to insurers last year “…after observing some insurers offering benefits and campaigns designed to drive business coming from third parties such as financial advisers.”
It noted that these types of incentives “…if not carefully managed, can create conflicts of interest that put the fair treatment of consumers at risk” (see FMA Raises Concerns Over Soft Commissions).
Michael Hewes, Director of Deposit-taking Insurance and Advice, said that while practices have moved on since FMA work in this area in 2018 and the introduction of the CoFI regime, it’s important insurers manage the risks appropriately.
“These benefits and campaigns, or soft commissions, have a place but insurers should actively consider these risks to ensure their fair conduct programmes are designed to support fair treatment of consumers.”
He says the FMA wants these insights “…to support insurers to take consumers’ interests into account when designing, offering and managing benefits and campaigns.”
Our poll remains open for another week and we are interested to learn your views…