The important points are that it says a regime should be introduced to cover all people who give advice, whether they belong to an association or not.
Also it challenges advisers to put a plan for self-regulation before the government by the end of next year.
The report says that advisers reluctance to disclose their commissions to clients may discourage people from seeking advice.
“Most advisers are paid on commission and are not required to disclose their commissions unless requested.
PRG2003 considers this limited disclosure and onus on consumers may be affecting consumers’ willingness to use financial advisers and impacting on private provision for retirement.”
The group wants the financial services industry to develop an agreed approach to self-regulation and report back to the Government with a comprehensive proposal by the end of 2004.
It says an independent chair from within the industry could facilitate this.
“We anticipate the proposed self-regulatory approach would cover all those who provide savings and investment advice and would include a code of ethics, dispute resolution and disciplinary procedures and, possibly, training for advisers.”
Financial Planners and Insurance Advisers Association chief executive Phillip Matthews supports what the group is saying and says FPIA is willing to take a lead in developing a self-regulation model.
"The challenge will be to get all the advisers in New Zealand to sit down and come up with an agreed self-regulation plan to present to the Government by the end of next year," he says.
Matthews says the plan should cover anyone who sells investments, shares, managed funds, insurance and mortgages.
Currently there are about 3000 advisers in New Zealand but only about half of these people belong to a professional body that has a code of ethics and a disciplinary process.
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