The chief executive of the Financial Planners and Insurance Advisers Association, Phillip Matthews, says that the Task Force should be congratulated for producing a practical report.
He said the association agrees with the proposed reforms which include the need for enhanced consumer information, enforcement mechanisms and enhanced ethical standards.
Members of the Financial Planners and Insurance Advisers Association already abide by a code of conduct and the association has a complaints and disciplinary process.
"People who use an FPIA member as their adviser are already afforded many of the things proposed by the Task Force," Matthews said.
The paper presents four different options for regulating the financial intermediary industry, ranging from self-regulation through to full-blown licensing.
Matthews said the association favours a co-regulatory regime which would have some state involvement.
"We are pleased that our vision of how the industry should be regulated is seen as a viable option by the Task Force."
Matthews said the objectives outlined by the Task Force would be best achieved through the co-regulatory option.
"The option of a strict, or heavy-handed regulatory regime is unlikely to meet the objectives articulated by the Task Force," Matthews said. "The Task Force acknowledges that such a move would be detrimental to the industry and would force higher costs onto consumers."
"Consumers need to have access to good quality, cost-effective financial advice," he said. "That is one of the best ways for New Zealand to increase its poor savings rate."
The Financial Planners and Insurance Advisers Association is also pleased to see that the Task Force has picked up on the need to improve financial literacy amongst New Zealanders.
"The association is strongly supportive of increasing financial literacy as this is one of its strategic goals."
Financial education is one of the big steps towards improving financial advice.
"A better educated consumer will be a more discerning consumer," Matthews said.
This is a media release from the Financial Planners & Insurance Advisers Association.
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