News Life and Health26 Apr 2018

New Zealand:Questions over whether market spared from financial advice misconduct

26 Apr 2018

Questions abound over whether the financial advice debacle in Australia, over banks or wealth management firms lying to regulators, rigging interest rates and charging customers for financial advice they never received, also occurs in New Zealand.

Australia is currently conducting a Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. It has uncovered serious cases of misconduct, including dead clients being charged for advice

The parent companies of New Zealand's big four banks have been found to have mistreated their Australian customers, and commentators say consumers should be skeptical of claims that things are "different" in New Zealand, reports Stuff.

Different environment

Commerce Minister Kris Faafoi did not think New Zealand had the "extremes of behaviour" seen in Australia and there was no evidence to suggest an inquiry was needed.

"New Zealand is a different environment and I have seen no evidence that these incidents are being replicated here. We have organisations including the FMA (Financial Markets Authority) providing oversight and they are monitoring the Australian Royal Commission as well as engaging with the businesses involved who have New Zealand operations.

"At this time I am not aware of any cause for alarm; however, my aim is for consumers to be able to access good quality advice so If we need to do more in the interests of the consumer ,then we will do so."

Prime Minister Jacinda Ardern told media the government was looking at what came out of the Commission "because [of] the link between our banking institutions and theirs".

Economist Shamubeel Eaqub, who is also an independent director of non-bank KiwiSaver scheme Simplicity, said that there should be an inquiry in New Zealand. If the incentives applied to staff were the same, it should be expected there were similar problems, he said.

He said it should be expected that businesses within the same parent company would have comparable culture and practices.

Australian banks with financial advisory operations in New Zealand include ANZ, CBA, NAB, and Westpac. These have been accused of misconduct.


 

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