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Some things don't make sense in adviser bill: PAA

Some of the impact of the Financial Advisers Bill may surprise the government, says the Professional Advisers Association.

Wednesday, December 12th 2007, 5:13AM

by Rob Hosking

The bill, which was introduced to Parliament last week, creates the legal framework for the long awaited regulation of financial advisers.

These provisions included the requirement that all advisers belong to Approved Professional Body (APBs) and meet certain educational and disclosure standards.

PAA chief executive Dave McMillan says the bill has "few surprises…but there's still some things that don't make a lot of sense and hopefully will be sorted out at the select committee stages."

Part of the bill assesses the likely impact of the changes on the industry and these may be a little far fetched, he says.

"I would hesitate to use the word 'naive' but there's a small amount of wishful thinking, at least, about what the outcomes might be.

"They suggest there will be greater competition on fees, and a greater uptake of people using financial advisers.

"That just doesn't match up with the reality of what is being proposed. You're increasing the barriers to entry, because all these new requirements are going to add costs.

On top of that you're going to have fewer advisers anyway, because some existing advisers will leave the industry."

Instead of there being greater competition between advisers, he says, there will be competition between suppliers to provide the most attractive remuneration for advisers.

There is a counter-argument to this – that the new regime will attract younger and higher qualified people to the industry: "Well it might happen, but you wouldn't want to bet your house on it."

Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.

« Alternative investments looking more attractiveSovereign takes regulation bull by the horns »

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Lender Flt 1yr 2yr 3yr
AIA 4.55 ▼2.29 ▼2.59 ▼2.65
ANZ 4.44 2.89 3.25 3.39
ANZ Special - 2.29 2.69 2.79
ASB Bank 4.45 2.29 2.59 2.65
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.29 2.59 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 2.89 3.19 3.39
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China Construction Bank Special - 2.65 2.65 2.80
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Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.50 3.40 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
HSBC Special - 1.99 - -
Lender Flt 1yr 2yr 3yr
ICBC 3.69 2.25 2.35 2.65
Kainga Ora 4.43 2.79 3.04 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.20 3.50 3.50
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.35 2.65 2.65
Liberty 5.69 - - -
Nelson Building Society 4.95 3.20 3.24 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
SBS Bank 4.54 2.79 2.79 3.15
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SBS Bank Special - 2.29 2.29 2.65
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The Co-operative Bank - First Home Special - 2.09 - -
The Co-operative Bank - Owner Occ 4.40 2.29 2.59 2.79
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TSB Special 4.54 2.29 2.49 2.65
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.09 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - 2.29 2.69 2.79
Median 4.55 2.79 2.99 2.80

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