The government has this morning released an options paper on overhauling the Financial Advisors Act.
There have been complaints the system is too confusing for consumers, and that some insurance brokers are receiving excessive up front commissions which can lead to the illegal practice of "churning" - where the broker encourages clients to change insurers regularly, so the broker can continue to receive the high commission. This also leaves clients vulnerable to having claims turned down due to accidental "non- disclosure" after being switched from one insurer to another by an adviser.
Paul Goldsmith is the Commerce and Consumer Affairs Minister.
Submissions close on 29 January for part 3 of the paper, and 26 February for parts 1 and 2.
