Why should consumers use advice?

FMA chief executive Rob Everett said advisers needed to decide what their industry offered New Zealand investors and consumers, and how it would sell that. “In marketing-speak, financial advice in New Zealand needs to firmly define a widely-recognised, long-term value proposition. And one that accommodates the regulatory framework,” he said.

“I know that there are firms and individuals that have a great reputation. I meet many AFAs who are committed and passionate about what they offer their clients and who have clearly earned the trust their clients put in them. But – generally – across the piece, the sector might be said to be lacking a good ‘reason why’.”

He said advisers needed to be able to explain why consumers should seek their services. “Is it better returns? Is it quality advice? Is it access to products they can’t access otherwise? Is it a combination of these things, or is it something else completely.”

Everett said New Zealanders did not understand the sector sufficiently to confidently draw on the value of advice that advisers would offer.  “The solution to this question – what do advisers offer New Zealanders and what are we doing to encourage New Zealand investors to seek advice? - is largely down to the sector. There’s an advocacy role for the sector professional bodies here, in assisting the sector to resolve its value proposition and ensuring that proposition is understood. By the Government, by the regulators, and by consumers.”