Clients don't want to pay much for advice
Protection Products Too Hard to Understand

Product Provider Direct Sales With No Advice

There are going to be product providers offering their product to clients direct and attempting to do that without offering any advice. Advisers will spot these and complain about them, feeling that they compete with properly Authorised or Registered advice processes. The FMA will keep an eye on them, especially when an information-only process is applied to a category one product.

But they will exist.

The process is essentially and information-only one, there is no advice is merely helping a client to review the product features for example, or find the information that they seek in a prospectus or investment statement.

You can spot them because they will have statements like this somewhere in their website or sales information:

"Please note that XYZ Ltd only offers ABC products and we can provide you with information about those but we cannot provide you with any advice regarding the suitability of these products for your personal circumstances"

Of  course, you could also just mystery shop them and see what happens.

Variations may emerge. Third-party information-only channels for example. Like a call centre or marketing outfit that offers answers to questions that are found in the prospectus and may refer or simply decline to assist in any other way no-matter how nicely the client asks.

Therein lies the problem. The risk of 'accidentally' offering an opinion or recommendation based on personal information a client may offer during the course of the sales interaction.


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