FPA boss urges IFA to take lead on regulation
The Institute of Financial Advisers (IFA) should learn from the Australian regulatory experience and "grapple with the grey areas" between legislation and regulation, Jo-Anne Bloch, head of the Financial Planning Association said yesterday.
Thursday, July 26th 2007, 9:08AM
by David Chaplin
Bloch said the IFA executive could get in early in New Zealand and develop guidelines for its members on how to operate under coming regulation without being too prescriptive.
She said while Australia adopted "principles-based" legislation much like the New Zealand proposals, the rules concocted by the regulator, the Australian Securities and Investments Commission (ASIC), have been interpreted as 'black letter' law.
According to Bloch, the number one issue for Australian financial advisers is the unwieldy and lengthy 'statements of advice' that they have been forced to provide to clients. She said if the IFA becomes an Approved Professional Body (APB) once the proposed New Zealand law is enacted it would have much more power to influence members than the FPA, which remains a voluntary body.
Bloch said it is still difficult for the FPA to discipline and expel members who breach its rules while an APB would be obliged to do so.
As well she said it would be "beneficial" for New Zealand to have one complaints body for financial advisers.
In Australia, Bloch said, there are eight financial services complaints mechanisms although most advisory groups belong to the Financial Industry Complaints Service (FICS).
"Some of our members still question why they should belong to FICS," she said.
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