Financial Advice New Zealand (FINANZ) supports the government’s plan to regulate financial conduct and ban sales incentives, stating that consumers are the big winners from the move as they would be more protected from unfair treatment.
Katrina Shanks, chief executive at FINANZ, commented that the new regime would ensure a consistent approach for the lifecycle of a product – from design to claim.
“All stakeholders must ensure people can access quality advice and that includes a remuneration system that allows a range of sustainable financial advice business models,” Shanks said.
“Removing sales targets and incentives is a good idea because we recognise that from time to time this has sent incorrect messaging to those providing advice. We will be interested in seeing more detail in this area.”
However, Shanks said they disagree with the claim that incentives can influence sales staff to pressure customers into buying unsuitable products, including policies they can never claim on.
“The example given is an extreme one which we would not consider to be representative of the practices of 99.9% of financial advisers,” Shanks said.
“We are all focused on good consumer outcomes, and that means good accessibility for the public to financial advisers. This announcement endorses the importance of financial advisers and the sustainability of their future.”
