Advisers snared in door-to-door sales crackdown

And according to a financial services law expert, there seems to be little recognition in the industry of the potentially far-reaching consequences of the proposed changes.

Chapman Tripp partner Tim Williams said section 71 of the Financial Markets Conduct Bill, which deals with "unsolicited offers", could result in Authorised Financial Advisers and QFE advisers being allowed to approach only their existing or former clients with offers of financial products (including KiwiSaver).

"The proposals would prohibit offering financial products during or "because of" unsolicited meetings, except in certain prescribed situations. Meetings are extended to include phone calls and electronic communications.

"The current proposal in relation to AFAs and QFE advisers is that they can approach, telemarket to or email only their existing or former clients. Under the current proposals, RFAs and "information only" salesmen can't approach anyone (other than people in trade) to offer them financial products.

"It's got the potential to curtail or regulate significantly the ability to market financial products," he said.

"If an adviser was at a trade fair, it would be fine if people go up to the adviser, but the adviser could not approach people as they are walking past. Telemarketing financial products would also be prohibited unless it became a regulated activity."

Williams said despite the potential ramifications of the proposed rule, there doesn't seem to be much awareness of the issue among the financial services industry.