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CoverNote is the official publication of IBANZ and is distributed FREE on a quarterly basis (March, June, September, December) to members throughout New Zealand and associated companies. Additional copies are available at a cost of $7.50 per copy, or 12 month (4 issue) subscriptions at $30.00, inclusive of postage and packaging. The articles or opinions featured within this magazine are not necessarily the opinions of the publishers or IBANZ, and they do not accept responsibility for the content of articles featured within the publication. No part of this publication may be reproduced without the written permission of the publisher. The publishers do not accept responsibility for loss or damage to unsolicited photographs or manuscripts. IBANZ enquiries should be made to: Gary Young, Chief Executive, IBANZ. Email: firstname.lastname@example.org IBANZ National Office located at: Level 1, 143 Nelson Street, Auckland. (P.O. Box 7053, Wellesley Street) Telephone 09-306-1732. Website: www.ibanz.co.nz
Gary Young CEO, IBANZ
A principle to live by
he issue of dealing with conflicts of interest is ever-present for intermediaries such as insurance brokers. First and foremost, an adviser owes a duty to put their client’s interests first. This is clearly stated in legislation and in professional codes of practice. The revised Code of Professional Conduct for Authorised Financial Advisers makes putting the client first the paramount standard. IBANZ has adopted this standard in its recently updated Code. Of course, the real challenge for any adviser is to recognise where a conflict exists. They must view the potential for a conflict not just from their own position but most importantly from the viewpoint of their client. “Perception is reality,” as they say. No matter how unlikely it may seem to the adviser, if there is something that could influence the way they deal with a client, then it must be acknowledged and addressed. An adviser is the professional in their particular area of expertise; they are in the best position to understand where a conflict could arise. It follows therefore that their duty is to deal with the potential issue and do so in an open and transparent way. Beyond seeing conflicts from an expert’s point of view, a broker must then place themselves in the position of a client, someone on the outside looking in on the profession. What could they possibly perceive, rightly or wrongly, as influencing the advice they are being given? Particularly important are factors that influence it in a way that benefits the adviser rather than the client. This is not at all easy, looking hard at yourself from another person’s perspective. It is not just about the obvious such as possible differences in remuneration, there are external and internal pressures that could influence the advice, too. A professional will carefully manage conflicts through a transparent process. Eliminating them is ideal but where this is not possible then they need to be managed and fully disclosure to the client. In this issue disclosed of Covernote we take a look at managing conflicts including seeking the view of the Chair of the Code Committee. He notes new obligations under the Fair Trading Act have made it illegal to make an unsubstantiated claim, even if it is true. The bar just keeps getting higher. Professionalism demands this issue is addressed by insurance brokers. IBANZ agrees, which is why we made putting the client’s interest first paramount in our Code. Members of IBANZ sign up to standards that clearly set them apart as advisers in an ever-increasingly complex world. The importance of that commitment is now more significant than ever. Gary Young, CEO, IBANZ