| Log In Subscribe for $0.99/week
3
3 Comment
Save Story
News

Advice firm bins OnePath agreement

Wednesday 11th of April 2012

Diversified has rescinded the agreement after director Norman Stacey told Good Returns the document was "lopsided" and OnePath was acting in an "arrogant" way.

The agreement contains a number of new clauses including that advisers must: act "honestly and in good faith and with due care, skill and diligence"; provide clients with "professional and courteous customer service", and act "in a manner that is not prejudicial to OnePath or any product or service".

"I feel they are acting in a manner very close to subjugating the interests of clients and advisers," Stacey said when first contacted on the issue. 

"I expected better behaviour from QFEs - most of the advisers signing that letter haven't needed that lesson [around courtesy and good customer service]."

Jeremy Nicoll, head of distribution at OnePath, said he was "gobsmacked" by the comments:  "Norman Stacey has signed his agreement so I'm surprised he has now chosen to criticise it."

He said the previous agreement had been in place for a long time and was due for a re-write.

"The three clauses there were just introduced into the distribution agreement as a result of changes in regulation - we are making it very clear these are the obligations advisers need to adhere to.  There's nothing new or different we're doing.  I'm just gobsmacked."

Asked what feedback it had received from advisers, he replied, "There's been no feedback; they just signed them and sent them back."

When Good Returns put Nicoll's comment to Stacey he confirmed Diversified had signed the agreement after binning it twice.

He said they felt "compelled" to sign or "historic investors, primarily in our ING Balanced Fund, would be removed from us and could be made direct investors in OnePath" if Diversified did not sign by the end of last week.

Yesterday he confirmed Diversified had since pulled out of the agreement after reaching a compromise on that issue.

Stacey said signing the agreement had been a mistake: "When you mentioned it, it really sheeted home the first principles that we shouldn't acquiesce to things that are wrong."

Comments (3)
Daryl McAlinden
"...act in a manner that is not prejudicial to OnePath or any product or service". No can do Onepath, as an AFA I must place the interests of the client first.
0 0
12 years ago
Robert Oddy
Responding that no one else has complained seems an odd dispute resolution mechanism. An agreement that requires an adviser to withhold relevant information because it might be perceived as being prejudicial to the issuer or any of its products or services is worrying; and especially as OnePath is a QFE and Kiwisaver default provider. The agreement seems to be at odds in this respect with its requirement that the adviser acts "honestly and in good faith and with due care, skill and diligence". It seems inconceivable that OnePath would deliberately want to cause an adviser to be in breach of Code Standard One requirements to place the clients interests first and to act with integrity. Receiving quality legal advice before signing an agreement or contract has always been important but is now much more relevant for every adviser. Past reliance on the perception that the adviser enjoys a good business relationship with an issuer and therefore does not does not need legal advice may prove costly. If recent reports are correct that increasing numbers of advisers are moving from commissions to fees, will issuers become more accommodating with their agreements - if in fact they consider them to be required at all?
0 0
12 years ago
Murray Weatherston
There is a huge asymmetry between the power of the manufacturer and the adviser who has an existing book of business with the manufacturer. I signed my OnePath Agreement blindly I guess as really what other option did I have? The article focuses on three areas. Two of them, being things already covered in the regulatory framework, don't cause me any anxiety. Its the 3rd one, the "do not criticise us or else" clause that I would get on my high horse about. OnePath's ancestors of course were involved in the DYF/RIF affair that saw ANZ put their hand deeply into their own pocket to save their bacon. I would like Jeremy Nicholl or One Path to answer the hypothetical question as to what would be their response against advisers who, if a similar circumstance were to occur in the future with a OnePath product, were publicly critical of One Path? Would they think they would invoke the clause to clobber the advisers who were being critical? If they say they wouldn't, then why would they insist that that clause remain.
0 0
12 years ago
Comments to GoodReturns.co.nz go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved.
Next Article
Value of index tracking seen in the numbers, says Kernel
Value of index tracking seen in the numbers, says Kernel
3 min read
No plain sailing around Castle Point
No plain sailing around Castle Point
3 min read
Latest News
The run of play is towards more and more underwriting, and not just at the traditional new business stage
The run of play is towards more and more underwriting, and not just at the traditional new business stage
3 min read
Value of index tracking seen in the numbers, says Kernel
Value of index tracking seen in the numbers, says Kernel
3 min read
NZ sharemarket starts week up 0.6%
NZ sharemarket starts week up 0.6%
4 min read
Can Games Teach Financial Literacy?
Can Games Teach Financial Literacy?
4 min read
News
More Read
Value of index tracking seen in the numbers, says Kernel
Value of index tracking seen in the numbers, says Kernel
3 min read
No plain sailing around Castle Point
No plain sailing around Castle Point
3 min read
Failure to plan for data-hungry AI will have consequences
Failure to plan for data-hungry AI will have consequences
3 min read
NZ Super Fund terminates Devon mandate
NZ Super Fund terminates Devon mandate
1 min read
Latest Comments
New customers locked out of ASB’s pre-approvals
As much as I disapprove of the ASB stance, I totally understand it, ESPECIALLY as the ComCom expect us to put an application to 4-5 banks, and not just the one we believe to suit the client the best. By demanding this, we would be tying the banks up with 4-5 times the applications necessary to secure a settlement. Banks would know that only 20-25% of applications are going to make it through to settlement. This shotgun approach is why banks are overloaded.
2 months ago Andy Phillipson
New customers locked out of ASB’s pre-approvals
This is pure BS from the major banks. In front of ComCom earlier in the year they denied any policy of channel inequality yet there clearly is from some (at board level) both in turnaround times and cashbacks for example. They need to staff up, sort their antiquated IT and give Advisers the respect they deserve. New Zealand borrowers are voting with their feet and using Advisers more and more. Are some banks starting their pushback? One as done it before so no surprise there.
2 months ago Jeff Royle
New customers locked out of ASB’s pre-approvals
As a financial adviser, business owner and ex-banker/home lender in NZ & Australia with almost 20 years experience I can tell you that this is very concerning for several reasons - first one being that as bank staff you still get paid regardless of whether you put the approval thru, lazy/incompetent/time poor bankers are often declining loans rather than taking the time to push a difficult deal thru as they get paid either way, as a financial adviser who doesn't get paid unless the deal settles we are more committed to securing an approval which is why more volume now comes thru the broker channels. This feels like it's the banks way of reducing costs by not having to pay brokerage to advisers when bank lenders doing nothing should be sitting on the broker overflow lines. This directly affects small businesses and is another example of banks playing God & redirecting profit margins back to their own coffers - there is no valid excuse for branch lenders doing nothing to not be sitting on these overflow lines. It makes a mockery of giving the choice back to the clients who are already typically having poor banking experiences when dealing direct with bank staff.l and in no way supports small businesses already doing it tough.
2 months ago Natasha Viliamu
New customers locked out of ASB’s pre-approvals
Another major bank today has announced no pre approvals via Advisers for under 80% LVR. That's at least 3 of them. All applications whether direct or through Advisers should be given the same priority and go through the same assessment process. Banks don't appear to have invested (enough) in staff or technology and given how much money they make, it is unacceptable. Lets hope it gets sorted soon!
2 months ago Craig Pope
New customers locked out of ASB’s pre-approvals
Sorry I don’t believe ASB are overrun with applications as we are traditional in a slow market so I think this” high volume “ excuse is rubbish, ASB will still post a massive profit due margins being so high but they can’t hire extra staff?? This is a disgrace! for consumers that choose to go through an independent mortgage adviser ASB are turning them away, but an ASB branch can write that deal no problem? , what happened to offering choice to the consumer? And being competitive? Are Comcom silent on this? Are the dealer groups /master FAP’s who have a monopoly over mortgage advisers’ access to bank mortgage lending silent on this? Why do we pay dealer groups /Master FAPs thousands in fees and costs if they can’t or don’t want to even back the people that pay their wages. All mortgage advisers want is an even playing field no more no less. How would ASB feel if all mortgage advisers in NZ stopped sending business to them for a few months?
2 months ago Valkyrie Vulcan