About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Thursday, April 24th, 10:30AM
rss
Latest Headlines

KiwiSaver guidance could be challenged in court

Controversial aspects of the Financial Markets Authority’s stance on KiwiSaver advice could be challenged in court and possibly even overruled, a lawyer says.

Wednesday, November 7th 2012, 6:00AM 5 Comments

by Niko Kloeten

The FMA’s guidance note, which takes effect in March next year, has received a mixed reaction from the industry, with the Institute of Financial Advisers supporting it and the Bankers’ Association slamming it.

But the final guidance note may not be the end of the legal debate, according to an expert on financial services law.

Chapman Tripp partner Mike Woodbury said it was possible advisers or companies could mount a legal challenge against aspects of the FMA’s interpretation of the Financial Advisers Act regarding KiwiSaver advice. 

“It’s probably not the sort of thing that would lend itself to a declaratory judgment,” he said.  “However, court guidance could be good to get the requisite certainty in one or two areas that arise.”

He said it’s “not inconceivable” that a judge or judges could take a different view to the FMA on certain parts of the guidance, although “I don’t know whether courts have gone as far as overturning a regulator’s view”.

Woodbury said a court case involving KiwiSaver advice would add useful case law and there were a number of examples in commercial law where courts had helped clarify contentious issues.

“It’s no different to other aspects of the law; over time people have evolved a consensus or the courts have issued meaningful guidance,” he said. 

“This has included the meaning of the word ‘material’ in securities law and the term ‘good faith’ in employment law.  Another one was the recent judgment around directors’ duties.”

Woodbury said the concept of “implied advice”, which was questioned by a number of submitters, was one part of the FMA guidance that could potentially be tested in court.

Niko Kloeten can be contacted at niko@goodreturns.co.nz

« Ross in hospital as managers appointedFund managers call for level playing field »

Special Offers

Comments from our readers

On 7 November 2012 at 9:19 am Amused said:
Chapman Tripp partner Mike Woodbury said it was possible advisers or companies could mount a legal challenge against aspects of the FMAs interpretation of the Financial Advisers Act regarding KiwiSaver advice.

The only people who will end up benefiting from a legal challenge to the FMAs interpretation of the Financial Advisers Act regarding KiwiSaver advice are lawyers themselves. The legal fraternity of New Zealand seem to want to apply case law to every aspect of society and in doing so make a hefty earner in the process. I have several school friends who are lawyers and they would be the first to admit this over a beer or two.
On 7 November 2012 at 11:44 am Dirty Harry said:
Can everyone smell the stinking triangle of self-interest here?

As a member of the IFA their position on this issue is a ways off mine. Which is fine, I guess. The IFA is trying to maintain relevance, and campaigning for what looks like the greater good of the punter (more people getting access to advice etc), but is sacrificing best of breed ideals in their pursuit of it. I just think there is little room for RFAs to be giving advice on investments - period. And the "guidance " seems more like a trap because the boundaries keep moving, and one could easily find oneself on the wrong side of the line.

The banks will hate it. Their QFE structures allow them to shove, push and promote their own cat 1 products using their own armies of staff. Of course they wish for less competition from RFAs not in their club.

And the lawyers. Amused covered them above. And if it is overturned where will that leave the RFAs?
On 8 November 2012 at 9:09 am AndyB said:
I fail to see how this approach helps. All of the big KiwiSaver providers will simply take an approach of making sure its not them.... instead of a helpful collaborative dialogue it becomes a 'cover backside' approach. Its not the time to get heavy handed with the industry but work with the good guys in order to lift the bar. No manager wants to 'represent' the industry and breach the guidelines.
On 8 November 2012 at 3:54 pm Jim Dowsett said:
I can't help thinking that if the banks are squealing then it must be a good thing?
On 9 November 2012 at 8:50 am Mitsi said:
The main aim should be that the person has the qualifications and competence to provide the advice. Too often the qualification is seen as being more important than the competency. We have all seen cases of higly qualified people being useless at the sharp end.
Add your comment:
Your name:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Good Returns go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AMP Home Loans 6.49 5.69 6.29 6.40
AMP Home Loans $200k+ 6.39 5.59 5.99 6.30
AMP Home Loans LVR <80% - - 5.99 -
ANZ 5.99 5.85 6.49 6.85
ANZ LVR > 80 5.99 6.35 6.99 7.35
ANZ Special - - 5.95 -
ASB Bank 6.00 5.85 6.49 6.85
ASB Bank Special - - - -
BankDirect 6.00 5.85 6.49 6.85
BankDirect Special - - - -
BNZ - Classic - - 5.95 -
Lender Flt 1yr 2yr 3yr
BNZ - GlobalPlus 6.19 5.85 6.29 6.29
BNZ - Mortgage One 6.60 - - -
BNZ - Rapid Repay 6.19 - - -
BNZ - Std, FlyBuys 6.19 5.85 6.29 6.29
BNZ - TotalMoney 5.99 - - -
Credit Union Auckland 6.20 - - -
Credit Union Baywide 5.85 5.90 6.50 -
Credit Union North 6.45 - - -
Credit Union South 5.75 - - -
eMortgage 6.04 6.15 6.69 7.19
Fidelity Life 5.70 5.40 6.00 -
Lender Flt 1yr 2yr 3yr
Finance Direct 6.10 6.45 6.69 7.10
First Credit Union 6.45 - - -
General Finance 5.95 6.25 6.50 7.10
HBS Bank 5.90 5.60 5.99 6.35
HBS LVR > 80% - - - -
Heartland 5.95 6.25 6.50 7.10
Heretaunga Building Society 5.75 5.50 6.30 -
Housing NZ Corp 5.75 5.50 6.30 6.40
HSBC Premier 6.24 5.59 6.29 6.55
HSBC Premier LVR > 80% - - - -
HSBC Special - - 5.79 -
Lender Flt 1yr 2yr 3yr
Kiwibank 5.90 ▲5.85 ▲6.19 ▲6.60
Kiwibank - Capped 5.65 6.50 - -
Kiwibank - Offset 5.60 - - -
Kiwibank LVR > 80% - - 6.29 6.40
Liberty 5.64 - - -
Napier Building Society 5.80 6.00 6.70 -
Nelson Building Society 6.45 5.95 6.60 -
NZ Home Loans 6.10 5.69 6.29 6.60
Perpetual Trust 7.70 - - -
RESIMAC - lo doc 7.34 7.14 7.49 8.05
RESIMAC LVR < 80% 5.84 5.64 5.99 6.55
Lender Flt 1yr 2yr 3yr
RESIMAC LVR < 85% 6.84 6.64 6.99 7.55
RESIMAC LVR < 90% 7.84 7.64 7.99 8.55
SBS Bank 5.90 5.60 5.99 6.35
SBS LVR < 80% - - - -
Silver Fern 5.95 6.10 6.55 7.05
Southern Cross 5.95 6.25 6.50 7.10
Sovereign 6.10 5.85 6.49 6.85
Sovereign Special - - - -
The Co-operative Bank 5.95 5.65 5.99 6.35
TSB Bank 6.04 5.40 5.99 6.40
Wairarapa Building Society 6.20 5.75 5.95 -
Lender Flt 1yr 2yr 3yr
Westpac 5.74 5.85 5.95 6.85
Westpac - Capped rates - 6.19 6.69 -
Westpac - Offset 5.74 - - -
Median 6.00 5.85 6.29 6.85

Last updated: 22 April 2014 9:04am

News Quiz

The Health Funds Association says recent research from Roy Morgan has "false findings". An example is at December 2013, HFA says the number with health insurance cover stood at 1,336,000, what was the Roy Morgan figure?

816,000

516,000

1,006,000

1,666,000

1,916,000

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by PHP Developer and eyelovedesign.com