Trowbridge Report Likely to be an Influence on the Review of the Financial Advisers Act in 2016

Sunday 29 Mar 15 9:05pm
FSC Media Release - An Australian report’s proposals to cap up front insurance policy commissions and flatten commission structures are consistent with discussions that have occurred within the New Zealand industry over recent years.

The Trowbridge Report, funded by the Australian Financial Services Council and the Australian Association of Financial Advisers while independently produced by John Trowbridge the former APRA member (Australia’s insurance regulator) will be influential in the review of the Financial Advisers Act in New Zealand currently underway, the New Zealand Financial Services Council says.

FSC Chief Executive Peter Neilson says high up front commissions are a legacy of when most New Zealand life insurance policies were mainly whole of life, endowment policies.  Most life policies sold today in New Zealand are single year renewable contracts but the legacy of high up front commissions remain.


There has been some movement to “flatten” commission structures in New Zealand but high up front commission remain a predominant feature of the industry here.


Attempts to address this issue by discussion have been thwarted by the Commerce Act which requires an authorisation before any conversation or negotiation on these issues can occur.  Our advice was that such an authorisation would be likely to cost $500,000 and would be incurred without any guarantee of a useful outcome.  The FSC insurance members therefore decided to use the Financial Advisers Act review to address any issues with them.


While New Zealanders are reluctant to pay for financial advice directly, it is likely that commissions will play a major role in what is sold.  Finding a business model to extend access to financial advice should be a major topic for the review of the Financial Advisers Act during this year and next, Mr Neilson says.


Peter Neilson
CEO Financial Services Council

021 395 891


facebook tag

About us

The Financial Services Council (FSC) represents investment and life insurance companies in New Zealand.

Read more >


Contact us

Ph: +64 09 985 5762

Email: fsc@fsc.org.nz

Level 33, ANZ Centre,
23-29 Albert Street, Auckland 1010