The Insurance Council of New Zealand supports the broad outline of proposals to lift the quality of financial advice released by Commerce and Consumer Affairs Minister Paul Goldsmith today.
“We have been strong proponents of the need for insurance brokers, who sell products on behalf of insurers, to be transparent about their remuneration, including soft commissions like overseas trips, and any conflicts of interest they have. So, we are pleased to see moves to do just that because it provides consumers with informed choice and importantly supports greater trust and confidence in insurance and other financial products,” Insurance Council chief executive Tim Grafton said in a statement.
“We are also pleased to see initiatives that will see financial advice held to a Code of Conduct that establishes appropriate client care, competence, skill and knowledge standards. Our members abide by high standards under our Fair Insurance Code, but it is equally important that professional advice is provided throughout the value chain to the consumer. A stronger focus on lifting conduct and ongoing professional development are welcomed,” he said.
Grafton says that other moves, such as to enable online advice and to simplify the types of advisers are steps in the right direction.
“It’s also good to see a pragmatic approach that recognises that providing factual information such as what a premium will be on a policy is not classified as financial advice. This will help distinguish activity that helps the consumer by providing factual information on a product they want to be informed about from advice which might require a full client needs analysis.”
While we will be consulting with our members on the detail of the proposals, the proposed changes are generally welcomed.