tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, April 12th, 6:36PM

News

rss
Latest Headlines

Taskforce calls for even tougher regulation on financial advisers

The Capital Markets Development Taskforce fears the new Financial Advisers Act will fail unless it is accompanied by additional stringent measures to govern the ethical conduct and description of financial advisers. 

Tuesday, August 4th 2009, 4:19AM 2 Comments

"If incorrectly implemented, it could produce an occupational licensing regime which ultimately benefits service providers rather than retail investors," says the taskforce, headed by Wellington-based merchant banker Rob Cameron, in its second report, issued yesterday.

The new report makes a slew of new recommendations aimed at numerous big capital markets issues besides the perceived integrity of the New Zealand managed funds and financial advisory industry, but dwells on the D-minus showing in the Morningstar report published in May that ranked 16 countries' fund management industries.

"In at least some parts of our market, we have a long way to go to come into line with international best practice and thus cultivate preferable outcomes for investors," the report says, recommending "more principle-based regulation focussed on ethical standards for issuers and advisers".

 The report made a number of major recommendations relating to the funds management and advisory industries, including:

  • Impose a fiduciary duty on financial advisers which requires avoidance of conflict of interest, independence from outside influences such as commissions, and competence to advise;
  • Regulate the words "independent adviser" to protect the meaning of independence;
  • Develop standardised, short form documents that clearly explain risks to relatively unsophisticated investors;
  • More standardised fee disclosure;
  • Make regulators able to be proactive, biased to the investor's perspective, and to penalise;
  • Overhaul New Zealand's settlements and payments system, in part to make capital-raising less intimidating and expensive for New Zealand small businesses, many of whom struggle to get beyond capitalisation by family and friends;
  • In upgrading the settlements system, explore also whether New Zealand has new global financial services opportunities in a post-credit crunch world
  • Develop a New Zealand-based derivatives market;

Perhaps most radically, the report recommends five principles be applied to investment advisers:

  1. The fair treatment of customers is central to the corporte culture of firms;
  2. Consumers are given effective, clear and accurate information about products and advisers;
  3. If customers receive advice, it takes account of their circumstances;
  4. Products perform as firms have led customers to expect, and service of an acceptable standard;
  5. Consumers do not face unreasonable barriers if they want to change product, switch provider, submit a claim or make a complaint.

Download full report here

« Advisers to become personally liable for adviceSovereign takes regulation bull by the horns »

Special Offers

Comments from our readers

On 4 August 2009 at 7:50 am Bazza said:
Principle 4 - Products perfom as firms have led customers to expect and service of an acceptable standard. My God who wrote this crap! Now firms have to guarantee investment performance. What part of 'Investing, and risk' didn't they understand. Next they'll want Government guarantees on Share market retuns.
On 4 August 2009 at 9:37 am Barry Milner said:
Absolutely right Bazza, Talk about stating the obvious, these people must either be complete idiots or believe that we are. What do they think is happening right now, with adviser disclosure, investment statements, prospectuses, needs analysis, codes of conduct and the whole raft of consumer protection legislation that already exists, every point they make is already covered. What cannot be legislated for and what they conveniently ignor is consumer greed with the constant demand for higher returns. That demand for higher returns, that greed was the main driver behind the flood of investments into finance companies, often against advice. As always when the zealots gain power the baby goes out with the bathwater.
Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 ▼6.75 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 ▼6.75 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.35 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.75 6.65
Median 8.64 7.29 7.32 6.65

Last updated: 8 April 2024 9:21am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com