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Brief Counsel

Financial advice regime under review

26 May 2015

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​The regime created by the Financial Advisers Act and the Financial Service Providers (Registration and Dispute Resolution) Act, both of which were passed in 2008, is under review.

The Government today released a consultation document, submissions on which will close on 22 July 2015.

We outline the issues on which comment is sought, and the timeline from here.

The issues paper outlines three proposed goals, and the key questions for feedback.

Goal ​Questions
Consumers have the information they need to find and choose a financial adviser. ​Do consumers understand the regulatory framework?

Should there be a clearer distinction between advice and sales?

How should commissions and other conflicts of interest be regulated?
Financial advice is accessible for consumers. ​Does the FAA unduly restrict access to financial advice?

How can compliance costs be reduced without limiting access to quality financial advice?

How can access to advice be facilitated?
​Public confidence in the professionalism of financial advisers is promoted. ​Should professional, ethical and education standards for financial advisers be raised?

Should the individual adviser or the business hold obligations?

Timeline

A review within five years of the regime’s commencement was mandated into the Financial Advisers Act out of recognition that the legislative process which gave birth to both Acts was tortuous.  This is an important opportunity for industry to input on potential improvements and enhancements, and we anticipate that there will be high levels of engagement from market participants.

Submissions close on 22 July.  Chapman Tripp will be making a submission.  We commented in a Brief Counsel last year on the main areas we see for improvement, with some further commentary earlier this year.

The recommendations for regulatory reform which the Ministry of Business, Innovation and Employment (MBIE) develops out of this exercise will be incorporated into a second consultation document to be circulated toward the end of this year.

For further information, or help in preparing a submission, contact the lawyers featured.

Contacts