Keep up the good work, Finsia tells government

Finsia has called on the government to further sharpen its regulatory pencil to help New Zealand’s financial services industry prosper.

Wednesday, October 1st 2008, 5:00AM

by David Chaplin

Martin Fahy, Finsia CEO, said while KiwiSaver, the trans-Tasman mutual recognition scheme and recent changes to the financial products regime have bolstered confidence in the sector, more needed to be done.

“... the Government needs to consider and address the concerns of the finance sector by providing clear incentives to succeed in business to ensure long-term economic growth in New Zealand,” Fahy said.

Finsia’s comments came after the results of a member survey, conducted by Roy Morgan, found that only 52% of respondents felt the recent changes to the financial products law would raise consumer confidence and lift savings.

According to the survey, 86% of Finsia members agreed that KiwiSaver was creating a “new culture of savings in New Zealand” but only 42% believed that the new financial product legislation would protect New Zealanders’ wealth.

As well, half of the survey respondents still found it difficult to carry out business across the Tasman despite the recent mutual recognition of securities deal with the Australian government, especially when attempting to sell wealth management and insurance products.

“Finsia strongly supported the mutual recognition regime adopted by the Australian and New Zealand governments earlier this year,” Fahy said. “However, these results suggest there are still a number of regulatory issues which continue to impact the ease of conducting business across the Tasman including: difficulty in raising capital; restraints impacting the accessibility of debt finance; as well as the complexities around managing financial risk. These challenges indicate that we still have some way to go to remove barriers impacting the integration of trans-Tasman activity.”

Almost half of Finsia members also said the non-bank finance sector required the most urgent regulatory oversight followed by the financial planning sector (32%) and funds management (14%).

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