Last week's Sunday Star Times article by Rob Stock "The high cost of bad advice" was followed up today with a second episode entitled "The hidden sales scandal".
In this second article Rob argues that "Customers of insurance and investment advisers are being sold expensive products not knowing that hidden incentives have distorted the advice they receive".
What caught my eye was this quote by a Wellington-based financial planner...
"The client needs to know why products have been recommended based on research and needs to be given choices which are then discussed."
I agree.
But the problem is that consumers are not usually offered 'ALL' the choices... are they? The article suggests that low cost products carrying lower commissions won't be put on the table. This leaves the consumer in the position of having to make an informed choice based on only SOME of the options available.
What about the idea of insurance advisers disclosing which insurers they represent and which ones they DON'T?
This would equip consumers with better info with which to make an informed choice.
And consumers making an informed choice is what it's all about... isn't it?
