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Globalising forces to impact on NZ advisers

Financial regulations in New Zealand will be increasingly driven by overseas developments, according to Institute of Financial Advisers (IFA) chief Peter Lee.

Wednesday, November 23rd 2011, 6:30AM 3 Comments

by Benn Bathgate

Lee also said that gives professional bodies such as the IFA that engage with global peers the chance to shape those future regulations.

He was speaking to Good Returns after trips to Washington for the Financial Planning Standards Board (FPSB) meeting and Australia for the Financial Planning Association (FPA) Conference.

"One of the interesting things that came out of that was the importance of the regulators - particularly IOSCO [International Organisation of Securities Commissions] - a coordinated body for regulators around the world," Lee said.

"I think what we're going to see is more and more regulations in New Zealand will be driven by what happens overseas and how that practice gets circulated."

IFA president Nigel Tate also said he expected to see future regulations driven by IOSCO.

"The majority of the securities commission heads around the world are members [of IOSCO] including New Zealand, and they are driving down through the G20 a common set of requirements and standards, that gets driven down to the domestic regulators."

Both Lee and Tate said that the IFA played a key role in the new adviser regulations here, and that given New Zealand's principles-based regulation, the IFA can continue to complement the regulators.

"That's what we've been doing with things like our guidance notes," said Lee.

"The FMA has quite clearly said that that's a role of professional bodies, because they don't want to do that with a principles based regime, therefore it fits very much into that,  here's a role for a professional body to create a bit more certainty. That seems to be a trend around the world, that move to principles based rather than prescriptive based."


Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to

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Comments from our readers

On 23 November 2011 at 9:34 am DSI said:
OK but tell me how did all the fantastic regulation in the USA help in stopping Bernie Madoff (in business for 40 years with a loss to investors of approx USD $65,000,000,000 & more recently the debarcle at MF Global (loss as high as USD $1,200,000,000)? Regulation suffocates business and does very little to protect clients?
On 23 November 2011 at 10:24 am JustThinkingAloud said:
Can't help but feel though that a principles based system works best once you've been through the prescriptive system or at least when it's supported by best practice guidance and support by the organisation laying out the principles- at least then everyone has a better understanding of what's expected. Splitting off the guidance and best practice for other organisations to take care of runs the risk of people not knowing who to turn to, and who has the definitive answer. More definition is needed from a central body to give direction and clarity around the principles.
Don't get me wrong - any guidance and clarity is good, but just as long as the FMA will stand by and accept that third party assistance.
We'll see what the coming months/years bring.
On 24 November 2011 at 8:44 am JustThinking Aloud said:
DSI - I couldn't agree less. Any business whole model has the customers best interests at the core and is set up to be able to justify what it has done in each case has nothing to fear from regulation. For those businesses, it is not the regulation that protects the client, but the ethos of the business itself. Unfortunately, case after case after case has shown us that the industry is riddled with less than scrupulous advisers - if regulation is able to help weed these people out of the industry, then I fail to see how that doesn't protect the client. I don't think anyone would hold out the regulatory system in the US or the UK as being perfect examples of how to do it, each has had it's issues. But without it, the public are at risk of finding one of the minority of 'advisers' who are out for no-one but themselves.
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