Commerce and Consumer Affairs Minister Kris Faafoi says the first reading of the Financial Services Legislation Amendment Bill in Parliament today is the first step in a significant package of changes to ensure all Kiwis can get good quality financial advice based on their individual needs.
The Bill will require all providers of financial advice to operate to strong, clear standards and ensure transparency around commissions.
“One of the significant changes is that we’re moving to an even playing field where all financial advice will have to meet good standards of conduct and competency,” says Mr Faafoi. “The current situation where some advisers are required to put the consumer first while others are not is really concerning to me.
“Some people are looking for relatively simple advice – like what KiwiSaver fund is right for me – while others will need more in-depth advice and financial planning services. Either way, I want all New Zealanders to be able to access the really sound advice and assistance they need to make informed financial decisions.
“Consumers put a great deal of trust in the people and institutions that provide financial advice, and good financial advice can make a huge difference.”
Mr Faafoi says both consumers and the industry have pointed out problems with the way financial advice is currently regulated.
“So this Bill strikes a balance between ensuring consumers can access quality advice, and not imposing undue compliance on the industry that could create unintended consequences that make advice less freely available.
The Bill will also improve disclosure to consumers. “Currently, consumers are often left in the dark about commissions and other factors that may influence the advice they receive.” Mr Faafoi says. “We need that to change to ensure people are well informed at every stage of seeking or receiving advice.”
The Bill will now be considered by the Economic Development, Science and Innovation Select Committee.