Last minute rewrite of adviser regulation rules [UPDATED]

Eleventh hour substantial repairs have been made to the legislation governing financial adviser regulations.

Friday, June 11th 2010, 3:47PM 2 Comments

Parliament’s Commerce Select Committee have reported back to day and made significant changes including making it less onerous for life insurance advisers and mortgage brokers.

Chapman Tripp Partner Tim Williams says the changes will make the new regime much more workable.

“Had the bill been passed as drafted…the effect on the financial services industry would have been disastrous.

Key changes include:

Although the changes represent a significant improvement, the regime is still very complex and compliance will require some skill and resources, notwithstanding the welcome attempts to make it more workable.

Code Committee chairman Ross Butler says he knew that irrespective of what came up in the Select Committee report, that there would be a need for a final round of consultation for the draft Code.

He says the Select Committee report needs to be approved by parliament first and then the Code Committee will have a quick form of final consultation which won't take any longer than three weeks.

"The final consultation process will not put the implementation timeline at risk," Butler says.

Financial Focus director Murray Weatherston says he thinks the changes made are generally to be applauded as the Select Committee has got rid of the worst parts and the number of people who have to be involved in the authorisation process has been reduced.

"If I was a pure insurance or mortgage broker I would have the champagne out of the fridge by now - there'll be a lot of brokers who were unwillingly enrolling themselves in courses who will be smartly cancelling them.

Weatherston believes lot of brokers and organisations heeding the Securities Commission and ETITO advice to prepare for authorisation early will feel betrayed.

He says if he could make a plea to the government it would be to confirm the date of 1 December for authorisation or change it to a more realistic date.

"We've been told we can't sit Standard Set B until late September and if legislation is passed at the end of the month there's only five months to go till 1 December."

Weatherston also asks that the Code Committee put out a final list of alternative qualifications for authorisation as he has heard a whisper of expansions.

He says even if they can't finalise the whole code, it would help immensely to have certainty as to whether or not advisers need to do courses.

"This needs to be finalised because people will now be saying it never helped them in the past to be early adopters."

 

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Comments from our readers

On 11 June 2010 at 4:57 pm Simon said:
ETITO, AdviserLink & the Securities Commission have led mortgage brokers & insurance advisers down the garden path from day one on regulation. NO ONE knew what was going to be required of brokers/advisers until the POLITICIANS themselves made the call. This whole exercise was turned into nothing more than a money making venture for ETITO and AdviserLink. Someone should write a book on this! What a laugh.
On 16 June 2010 at 11:01 am w k said:
Having followed the articles, I have only one conclusion to make - the people drawing up these regulations most probably do not understand the concept of Financial Planning.
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