Commission chief executive John Farrell says the review aims to help develop a more informed market, and to provide authoritative data on the industry and its practices.
He says the commission will then be better able to compare what's happening in New Zealand with practices in other jurisdictions.
With the globalisation and growth of the industry there has become much greater scrutiny of individual country's practices and regulations.
For example the International Organisation of Securities Commissions is promoting the licensing of funds managers are regulatory best practices.
Farrell doesn't expect that the review will result in the commission giving the industry a set of guidelines, rather the commission would prefer that the industry self regulates itself.
While this already happens through organisations such as the Investment Savings and Insurance Association, not all fund managers are belong to such organisations.
The commission says there have been cases of malpractice, particularly overseas, however this review hasn't been triggered by the emergence of any specific problems in New Zealand.
A comprehensive questionnaire has been sent to managers and the commission hopes to have responses by the end of February.
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