Consumers 'deserve clarity'
A new 'financial advice representative' designation is a missed opportunity, the working group developing Financial Advice New Zealand says.
Friday, March 10th 2017, 5:59AM 5 Comments
by Susan Edmunds
The Financial Services Legislation Amendment Bill exposure draft is out for consultation.
It replaces the Financial Advisers Act with provisions in the Financial Markets Conduct Act.
Instead of AFAs, RFAs and QFE advisers, there will be financial advisers, financial advice representatives and financial advice providers.
The Financial Advice New Zealand working group said the public needed more clarity around the difference between sales and advice.
"The proposed FAR designation is a big missed opportunity, for the regulator, for the value of advice and for New Zealanders," it said.
"To increase awareness and understanding, and as a result confidence and access, the public need 'advice' and 'advisers' to stand for something quite distinct from other financial service experiences."
The group said the public needed advice to stand for a highly valuable experience, in which they engaged a qualified and accountable professional who uses their knowledge, expertise and dscretion to help them make an informed choice appropriate to their personal needs and situation.
"An FAR in most cases will not be providing a comprehensive advice experience, and will not be individually accountable for their advice. But with the word ‘advice’ in their title, how is a member of the public to know the potential limitations of the FAR service? How will they be able to differentiate between this and the comprehensive advice service of a Financial Adviser (FA)?
"Disclosure and compliance may very well clarify limitations once a member of the public has sat down for that first meeting; but how do they identify their preferred experience before they choose a person or brand to deal with?"
The group said if the regulation missed the opportunity to provide clarity, the role of Financial Advice New Zealand would be made even more crucial.
"In this changing world of financial services, it is abundantly clear that the adviser community, the public, and ‘advice’, need the clout of a strong, unified voice."
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