The Financial Planners and Investment Advisers Association (FPIA) has decided, in an interim decision, that it doesn't support the compulsory adviser registration scheme being promoted by New Zealand First.
Co-president David Milner says the board recently decided that it favoured a "more light-handed" approach to registration.
"Registration in itself won't stop malpractice," he says.
Instead of compulsory registration the FPIA would prefer a system where advisers could only have agency agreements with fund managers or life offices if they are a member of a professional association.
He says advisers don't necessarily have to belong to the FPIA, they could belong to another organisation such as the Institute of Chartered Accountants or the Law Society. A professional association, he says, is one which has standards, a code of ethics, plus a robust disciplinary process.
Under this definition organisations such as the Society of Independent Financial Advisers and the Life Brokers Association probably don't qualify as professional associations.
Milner says the problem in New Zealand is "not so much malpractice, but bad advice."
The FPIA is trying to get funding for the former Insurance and Investment Advisers Association Development Trust so it can provide advisers with continuing education and training services.
He says the FPIA has talked to the Securities Commission, the Investment Savings and Insurance Association and politicians about registration.
The decision not to support the NZ First proposal is an interim one and would require ratification at the association's council meeting next year.
Meanwhile, NZ First leader Winston Peters says if his party is successful in the election this year adviser registration will become part of coalition negotiations.
He told the Waikato branch of the FPIA yesterday (Wednesday) that advisers "will be required to undertake a registration process and maintain this through a continuing professional development programme similar to the accountants society."
Other key negotiation points are that:
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