Clear fee disclosure prevents this problem:

Susan Edmunds, reporting at Stuff.co.nz, tells us of a client that was surprised by the extent of the fee a mortgage broker charged when they refinanced their loan early. They complained about it to FSCL, here is the essence of their decision: 

FSCL said the adviser was entitled to a fee but the terms of engagement were too vague to be enforceable. “The clause did not set out how much the clawback fee could be, or how the fee would be calculated. It simply said that, if the client fully repaid their loan within 24 months, the adviser would be entitled to charge an early repayment fee. For all [the client] knew, it could be a $25 fee, as opposed to $2500.” 

Faced with that, the adviser agreed to waive the fee. That's the problem with a vague disclosure - a few examples could have made this really clear. Glen McLeod makes a robust defence of the right to charge such a fee - which I broadly agree with - I just think it should be really clear to a client what the fee will amount to. In the absence of good disclosure, the dispute resolution bodies will rule in the client's favour. I quite like the approach outlined by Bruce Patten, of LoanMarket, in the article. I believe that would stand up to a test such as this complaint. 

 


AIA enhance AIA Vitality, and more daily news

AIA has announced the addition of a new benefit to AIA Vitality. Customers will have the chance to earn an Apple Watch when weekly physical targets are reached. This change is intended to motivate customers to increase physical activity. To have the chance to earn the Apple watch customers will need to enter into an interest-free loan agreement to ensure upfront costs are covered. Once customers enter to agreement, AIA contributes to monthly repayments, if physical targets are met, customers will not be required to pay anything. Len Elikhis, chief product and vitality officer, has said that this new addition to AIA Vitality will offers significant value to customers.

“AIA recently launched a new benefit for its AIA Vitality customers, and is giving them the chance to earn an Apple Watch for reaching weekly physical targets – an initiative it says will be a strong motivator for customers to increase their physical activity.

 

To earn their Apple Watch, customers must enter into an interest-free loan agreement to cover the upfront cost. AIA then contributes to the monthly repayments, and if all physical targets are reached, the customer ends up paying $0.

 

Len Elikhis, chief product and vitality officer says the initiative offers “significant value” to the AIA Vitality membership base, which has been growing steadily since its launch.”

 

Elikhis noted that the new initiative is intended to make the Apple Watch Series 6 more accessible as well as encouraging members to achieve goals. 

“The Apple Watch Benefit is another example of the significant value AIA Vitality is providing for our members,” he concluded.

 

“The aim of the benefit is to make it easier for members to access Apple Watch Series 6 to further encourage our members to achieve their physical activity goals.” Click here to read more 

In other news

AMP: AMP Capital insider flies into top job

NZFSG: NZFSG Makes New Appointment


NZFSG and Kepa merge, and more daily news

It was announced that Kepa’s mortgage business will merge with NZFSG. The takeover will see Kepa members being integrated into the NZFSG-Loan Market dealer network. Members offering general insurance advice will remain in Kepa. Kepa advisers will have the option of moving to NZFSG's MyCRM system and Kepa employees will be transferring.

“The nation's biggest broker group, NZFSG has effectively completed a takeover deal. Kepa's mortgage business will become part of its larger rival, marking the latest phase in industry consolidation.

The two groups have been in talks for several months, TMM Online understands.

Kepa’s members will be integrated within the NZFSG-Loan Market dealer network. Kepa advisers will be given the option to move onto NZFSG's MyCRM system, while Kepa’s staff will transfer to the merged business.

Both Kepa and NZFSG have said the merge will assist in better navigating the new regime and would create a national dealer group with over 1,600 members.

“Both parties believe the additional scale will help under the new financial advisers' regulatory regime, which will place greater demands on groups acting as Financial Advice Providers for their members. 

In a statement, the two groups said the deal would create a national dealer business with more than 1,600 members, settling more than $17 billion of mortgages and issuing $30 million of life insurance premiums each year.”

Congratulations to NZFSG-Loan Market and Kepa, on the successful conclusion of this deal. These take an enormous amount of work sustained over a considerable period of time. We wish them all the best in working through the coming year - which is shaping up to be a very busy one for everyone involved in the provision of financial advice due to the implementation of the new regime. 

Click here to read more

In other news

TikTok controversy ushers in new age of cyber threats