How this site works

What a financial adviser does

An adviser licensed to give regulated financial advice on insurance can do the things this site deliberately cannot: look at your situation, form a view, and recommend a particular policy. In practice the work is:

• Working out the need. Not a rule of thumb, but your actual household, income, debts, other cover and what you are trying to protect against.
• Matching it to what an insurer will actually offer. Two people with the same need get different terms depending on health, occupation and history. This is the part that is genuinely hard to do alone.
• Getting the application and the disclosure right. Non-disclosure is one of the common reasons a claim fails, and it is usually accidental.
• Structuring the policy. Who owns it, who is the beneficiary, whether covers are attached to each other, stepped or level premiums.
• Being there at claim time, which is when any of this is worth anything.

How advisers are paid in New Zealand

Most commonly by commission from the insurer when a policy is taken out, sometimes with an ongoing servicing commission afterwards; sometimes by a fee you pay directly; sometimes both. The premium you pay is generally the same whether you buy direct or through an adviser, because the commission comes out of the insurer’s side of the transaction.

We do not publish commission rates. They vary by insurer, by product and by the individual agreement, and we could not source a New Zealand figure we were willing to stand behind. Your adviser must tell you theirs.

The rules on that are in the Financial Markets Conduct Regulations 2014, Schedule 21A. A financial advice provider has to make certain information publicly available, including its fees, its conflicts of interest and its commissions, and has to disclose the specifics when it gives you advice. The definition of what counts is broad:

“A commission or other incentive is a commission, benefit, or other incentive (whether monetary or non-monetary and whether direct or indirect)— (a) that is given to A, P, or another person connected with the giving of the advice as a consequence of A giving the advice or the client acting on the advice…; and (b) that a reasonable client would expect to, or to be likely to, materially influence the advice given by A.”

— Financial Markets Conduct Regulations 2014, Schedule 21A cl 2(3)

Note the words “another person connected with the giving of the advice”. That is us. The fee an adviser firm pays us for an introduction sits inside that definition, which is why our referral agreement will require the firm to disclose it alongside its own commissions, and why we disclose it here regardless.

How we are paid

A flat fee per accepted introduction, paid by the adviser firm, invoiced monthly. Not a share of any premium, not tied to the amount of cover, and nothing from any insurer. The reasoning, in full, and the exact figure once an agreement is signed, is on the disclosure page.

Who you complain to

Two different places, and it is worth knowing which is which before you need it. About this site — something we published, the fee, how we behaved — email us. About advice you received, complain to the adviser firm, and then to its dispute resolution scheme if you are not satisfied. Every provider serving retail clients must belong to one of four approved schemes:

• Banking Ombudsman (BOS)
• Insurance and Financial Services Ombudsman (IFSO)
• Financial Services Complaints Limited (FSCL)
• Financial Dispute Resolution Service (FDR)

Where the line is

Life Insurance NZ does not give financial advice and is not licensed to. Under the Financial Markets Conduct Act 2013 a person gives financial advice if they make a recommendation or give an opinion about acquiring or disposing of a financial advice product, and a contract of insurance is one of those products. The Act then says a person does not give financial advice merely by providing factual information, by giving an opinion about a kind of product in general, or by recommending that somebody obtain financial advice. Those three things are what this site does. The disclosure page quotes the sections in full.