INSURANCE
by Steve Wright
Insurance adviser conduct obligations Steve Wright takes a critical look at the minimum standards of competence and due care, diligence and skill and how they will affect the insurance advice world. Many advisers are currently doing their level five qualification. This is the minimum standard of competence all financial advisers must meet in order to give financial advice (as set out by part two of the Code). Fortunately, or unfortunately, depending on your view, achieving the level five certificate is just the minimum requirement, the “ticket to the game”, it is not the end of an adviser’s learning, it is only the beginning. In addition to the minimum standard, the law (soon to be s431L of the FMC Act) requires advisers to exercise due care, diligence and skill.
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ASSET MAY 2020 | WWW.GOODRETURNS.CO.NZ
This means knowing and understanding enough about the various issues to give acceptable life and health insurance advice. In many cases the knowledge needed to properly advise clients is much greater than that which is likely to have been gained from the minimum standard. In particular, this is true for “independent” advisers who pledge to sell their client the “best product” from a range of competing providers. By “independent” I mean advisers who are not constrained from recommending the best provider’s solution, either due to contractual reasons or any other reason (like emotional attachment or undue prejudice).
