by Rob Hosking
The document makes a distinction between “information only”, “product provider” and “high level” advisers, with different levels of disclosure and other requirements for each.
But the line between the second and third is likely to cause problems, says both the Professional Advisers Association and the Institute of Financial Advisers.
“You can understand what they’re trying to do, but this is going to create distortions,” says PAA general manager Dave McMillan.
“If you are determining benefit levels, claim conditions and so forth you are still providing advice and if you’re doing that you should be competent to do that and you should be covered by the full set of industry rules.
“This will create distortions – some people will develop extremely close relationships with a supplier and stay within the ‘product provider’ definition because it will be an extremely convenient way of working.”
He suggests a way around the issue is that some products are extremely simple and easily understood and could be exempted.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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