Commerce Minister Kris Faafoi tells advisers there won't be a ban on commissions, but some will go. 

Faafoi, speaking at the Financial Advice New Zealand conference, provided delegates with an update on work currently being done by the government.

The good news for many advisers is that there are no proposals for a total commission ban.

"I'm not considering a total ban on commissions," he said.

"I want to recognise the importance of commissions for your remuneration and in turn for the provision and availability of sound financial advice to Kiwis."

Faafoi acknowledged, "financial advisers play an important role in helping New Zealanders make wise financial decisions and I want to ensure that role is strengthened rather than weakened."

However, the government is currently considering some changes to the "more problematic types of incentives such as target based incentives and soft commissions."

He said any incentives need to contribute to good customer outcomes.

One of the big priorities of the proposed changed are that banks and insurance companies are treating customers fairly. Also the aim of any changes is to make sure that the products and services offered provide good customer outcomes through the "full life cycle" of the product.

Faafoi acknowledged there is concern in the industry about the pace of change, however he wants to "move quickly to achieve good customer outcomes."

In his prerecorded speech the minister also referred to the long-overdue review of the Insurance Law Contracts legislation and he encouraged advisers to get involved in the current review of default KiwiSaver schemes.

He would like to see more investors engage with their KiwiSaver accounts and more advisers working in this area.

"Getting good advice at right time can make big difference," he said.

 

 - Good Returns