What happens to errant advisers under new rules?

Under proposed new rules for advisers announced by Commerce Minister Lianne Dalziel earlier this week it was revealed that financial advisers would have to join an approved disputes resolution service.

Thursday, June 21st 2007, 7:01AM

One of the criticisms of the proposals is that there will be more than one dispute resulotion service. A number of organisations had earlier argued that there should be one ombudsman service for the industry.

What is unclear is how people who win a case against an adviser will be compensated.

Under current ombudsmen schemes most of the members are well-capitalised corporates who have the ability to make payouts.

Dalziel was asked about what happens if an adviser has to make a payout and can't afford it?

She took a "raincheck" on that question. "We don't have that level of detail."

Her comments indicated that this issue maybe tied down to each Approved Professional Body's rules.

Also there were questions about what happens to an adviser if they are kicked out of an APB. Can they join another one? Dalziel said yes, but it depends why they were kicked out in the first place.

Being kicked out of an APB "may not be absolute barrier" to joining another one.

She said advisers still need to be licenced, and had to pass the necessary standards required.

"There will be a point of time where they wouldn't be licenced."

Also she expected there to be a "high degree" of information sharing amongst APBs.

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What happens to errant advisers under new rules?

Under proposed new rules for advisers announced by Commerce Minister Lianne Dalziel earlier this week it was revealed that financial advisers would have to join an approved disputes resolution service.

Thursday, June 21st 2007, 7:01AM

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