Perhaps we should say – which area presents the greater compliance risks: providing advice or providing product?

It is something of a truism that insurers, for example, tend to prefer the risks of supplying product, and view the giving of advice as risky.

Advisers on the other hand, find that insurer reluctance to undertake any advice risks as strange – they, obviously, prefer the risk of providing advice.

But the point is more sharply made when you consider those large financial institutions which have left the advice market: for example, many banks had life advisers and have shifted from the provision of advice to straight referral, deeming this to be lower risk.

Few advice businesses invade the product segment, some who have offered product in the past, have also withdrawn from the market – consider Southland Building Society, for example, who now maintain an adviser group, but do not offer their own insurance products.

We know that there are risks in each part of the value chain – product and advice.

There are substantial volumes of complaints made about both providers and adviser companies.

We also know that insurers often see themselves as custodians, ensuring compliant practices by advisers through accreditation and monitoring.

They can be forgiven for taking on this role – it has been, essentially, forced upon them by conduct law. It is logical too: larger, better-resourced companies, with wide market influence are the logical place to go if you want to try and lift standards across the sector.

Yet advisers can also be forgiven for thinking this is a bit rich.

Having worked with insurers for many years, most feel that the insurers themselves have much work to do to get their house in order from a compliance perspective.

They too can be forgiven for this view.

The Financial Markets Authority, starting with the conduct and culture review, and continuing through a range of investigative processes, have identified fair dealing issues which they have sought to have remedied.

They have taken these actions to the courts and obtained penalties against insurers totalling nearly $10 million since March 2021. There are some actions still ongoing.

Returning to the question "which is the riskier business?"

I would not now want to pick an answer.

There is no part of the industry that can claim great superiority over other parts.

I think it is useful to say that there are substantial risks in both providing product and providing advice.

The FMA is being persistent in pursuing improvements in market practice wherever it finds issues of concern.