FinCap welcomes the Financial Markets (Conduct of Institutions) Amendment Bill and especially the incoming requirement that banks and insurers consider how their conduct could challenge the wellbeing of those unable to pay.
Ruth Smithers is the Chief Executive of FinCap, an organisation supporting around 900 community financial mentors at 200 services across the nation.
She says this is a win for all in Aotearoa as the reform lays a pathway to improve the culture of institutions at every level, including products being designed and sold with actual usefulness and fairness to whānau in mind.
“There are too many links between businesses operating here and across the Tasman to ignore the findings in Australia’s banking royal commission.”
Adoption of FinCap’s and many other submitters’ recommendations that potential vulnerability be considered as a part of fair conduct programmes is also great news.
“Financial mentors regularly see where unfair conduct in terms of poor service, exclusion from access or a lack of appropriate assistance from financial institutions causes serious harm to those who face difficult circumstances in the community.
These new requirements are a fly in the ointment for any part of these businesses seeking to look past that.”
Smithers also welcomed work within the reform to tackle issues with commission-based selling for these institutions’ staff.
“Reining in sales incentives so that salespeople have at front of mind what options work best for each whānau rather than what will make their employer the most money, is a fence at the top of the cliff rather than an ambulance at the bottom.”
With these reforms now in place FinCap encourages work on commission-based selling across the board.
“Commission-based selling delivering unaffordable and unproductive mobile phone plans, car loans, add on ‘junk insurances’ to those car loans and all sorts of other things that are not fit for purpose are on our radar.
One can be the start of a long road of financial difficulties and a lot of avoidable work to set things right for whānau and the financial mentors they work with.”