David Whyte, industry commentator and director, said the recently-released options paper proposing insurance reforms had some "strange proposals", including some that would interfere with the advice relationship by requiring insurers to take more responsibility for clients' outcomes.

"I don’t believe this is what officials intend when they seek to increase a life insurer’s responsibility for ‘good client outcome’ but that’s what the consequence would be if adopted," he said.

"And for me, this is the piece that is missing from much of the regulators and Ministry officials thinking – the existence of the axiomatic relationship between clients and advisers.

"Independent advisers don’t live or die on the merits of one company’s products or another – but they survive and thrive by building trust with clients throughout the process - with the addition of claims advocacy.

"In the process of building this trust, an adviser must have interpersonal skills which include integrity, empathy, and awareness. Put simply, independent intermediaries who cannot create a trusted adviser relationship with their clients do not survive in the long term. But for those who do, producing ‘good client outcomes’ is the primary function of their input to the relationship."

He said there wa sa lack of evidence that good client outcomes were not occurring in the independent adviser space.

"The several reports referred to frequently by commentators – the reports on remuneration and on soft dollars are outstanding examples - were produced using flawed methodologies, and produced conclusions which were in some cases risible.

"Nobody condones churning and many advisers rejected the overseas incentive trips but to conclude that there is a churn problem of any significance, or that a significant number of advisers create poor client outcomes due to inappropriate incentives, are conclusions that cannot be safely made from these two reports."

The new code of conduct for advice would put significant responsibility on advisers to create good client outcomes.