Insurance Brokers Oppose $1 million Prize

NEWS RELEASE 9 November 2001

Insurance Brokers Oppose $1 million Prize

A new $1 million prize draw for financial advisers is wasteful and excessive, according to leading independent insurance brokers, Stone & Associates.

Sovereign Limited yesterday announced plans for the huge cash reward, aimed at boosting sales of Sovereign insurance and investment policies.

But the unprecedented prize incentive has met with strong opposition from within the insurance industry.

Nationwide brokers, Stone & Associates believe the promotion is ill advised and should be abandoned.

Managing Director Todd Jones says at a time of rising premiums for health and income insurance, many New Zealanders will wonder how companies like Sovereign can afford such extravagant incentives.

Mr Jones says the emergence of tempting prize offers and rewards for advisers is a growing concern.

"Incentives are now common in the insurance industry," he says. "But they started out as small rewards like golf outings or travel."

"To offer a million dollars is simply unheard of."

Mr Jones says many New Zealand consumers are unaware of the rewards offered to financial advisers.

"Planning for future financial security is a major undertaking. The advice you gain from a financial adviser should be motivated by what is best for you; not by the prizes or rewards on offer to advisers.

"Anyone dealing with a financial adviser should ask for details about their remuneration, or any other factors influencing their advice.

"Sovereign's million dollar promotion reinforces the need for professionals who can offer consumers completely independent advice."

FOR MORE INFORMATION, PLEASE CONTACT

Todd Jones Managing Director Mobile: 021 344 810 Phone: 09 523 2720 Email: stoneassoc@xtra.co.nz

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