While I will do a thorough review of the document and its implications for clients in due course, I thought it worth mentioning some of the questions people have asked about the report. They are not my view, but a good reflection of the, sometimes contradictory, views of people in the industry:
- Well, that's better than expected
- More products should have been listed as cause for concern (along with...)
- Less products should have been listed as cause for concern (concern for product scope to be set)
- So, are commissions to be banned? (based on the NZ Herald's take on the report, not the report content, obviously)
- Will advisers have to go to eight different training course run by insurers on how to sell their products? (considering one vision of an attempt to direct on suitability)
- If insurers are responsible for suitability doesn't that push them into the advice space? (a valid concern, detail is available in recent reports)
- The FMA's big data trawl found very few advisers aggressively replacing business
- I've chosen my last supper - my personal favourite, from an adviser who actually has very little to worry about
My feeling is that there is a lot to address, and that I think most insurers are not that surprised at much of the content. As a fairly high-level document, there are some significant questions. A lot of concerns were based on an absence of evidence of good management, rather then evidence of bad management or bad intent. But the concern, and the link to the Hayne report, is whether a culture of focus - in this case, on sales, perhaps - rather than good outcomes could dominate in decisions about value for customer.
Anyway, more details for clients, coming soon.