Time for change is now

Recent pronouncements on risk product commissions have tended to be at either end of an opinion spectrum.

At one end - all commissions are the cause of all conflicted behaviour, at the other, individual conduct drives conflict and the commission structure has nothing to do with inappropriate behaviour and/or "churn".

The reality probably lies somewhere in between these views and the adviser industry must find a way forward to assist and inform those charged with supervision and monitoring financial advisory businesses.

While the FMA has uncovered a few practitioners who appear to have acted in a way that has subordinated some of their clients’ interests, there is no substantial evidence or statistical data that supports the contention that ‘churn’ is a widespread systemic issue. Indeed, recent statistics indicate that lapse rates in the NZ market are reducing overall.