Changes to financial adviser regime announced
Changes to the Financial Advisers Act 2008 and the Financial Service Providers (Registration and Dispute Resolution) Act 2008 have been announced by Commerce and Consumer Affairs Minister Paul Goldsmith.
He says the changes come after a comprehensive review, which will simplify regulation, enable advisers to have sensible conversations and encourage more people to seek high quality advice tailored to their needs.
"A lot has happened since these Acts were originally passed including the introduction of the Financial Markets Conduct Act. The time was right to reconsider the regime to ensure it meets the needs of both consumers and industry."
Mr Goldsmith says among the key changes are:
- Creating an even playing field for the provision of advice by requiring all advisers to put the interests of the consumer first and meet competency requirements.
- Encouraging innovation and enabling the provision of online "robo" advice.
- Ensuring consumers can access good advice to questions such as "What KiwiSaver fund is right for me?"
- Improvements to transparency by introducing simple disclosure requirements and useful terminology.
- The need for businesses to demonstrate a strong connection to New Zealand in order to be registered under the Financial Service Providers legislation.
"All providers of financial advice are now required to be more transparent about limitations on their advice and disclose information regarding conflicts of interest, such as commissions," he says.
Mr Goldsmith says the new regime will be refined further through an exposure draft of the proposed legislation. The bill is expected to be introduced to Parliament at the end of 2016.
The Government has still to make decisions on a number of matters. The Ministry of Business, Innovation and Employment (MBIE) will report to Cabinet on these, including membership and proceedings of the Code Committee, compliance and enforcement tools, and arrangements for transitioning to the new regime.
Further information on the MBIE review and proposed changes is available here.
Last updated on the 16th September 2019