New Zealand: Govt amends law to improve financial advice
Source: Asia Insurance Review | May 2019
Commerce and consumer affairs minister Kris Faafoi has said that New Zealanders should have better access to quality financial advice as a result of changes in the financial services legislation, that passed through parliament in April.
“According to the Commission for Financial Capability, 68% of New Zealanders have money worries. Many are overwhelmed by the sheer volume of financial choices they need to make and the complexities in understanding financial language is often a barrier to making decisions.
“The changes we will now put in place through this legislation are designed to make it easier for people to get advice, to better understand their options, and to ensure advice is of consistent quality.”
Mr Faafoi said, “Financial advisers will be required to prioritise the customer interest, meaning their foremost consideration when recommending a product is how well it meets their customer’s needs. This will help address the problem of some advisers being incentivised to recommend a particular product because it has a higher commission attached to it.”
Financial advice providers will be accountable for the advice provided to customers on their behalf and will need to disclose key information to clients so they can make informed decisions.
Mr Faafoi also said, “Anyone providing financial advice to retail clients in the new regime will require a licence granted by the Financial Markets Authority. People providing financial advice will also need to meet new competency standards and comply with a professional code of conduct, which I expect to finalise in the coming months.”
The new regime for financial advice is expected to come into effect in the first half of 2020, with applications for transitional licences opening later this year. A