I was pleased this week to get an email from TOWER group managing director Jim Minto where he expresses his views on the future shape of the advisory industry. As readers will know we had plenty of responses from advisers - all supporting the argument I expressed in my Blog. Jim's email is interesting as it comes - I guess you could say from the other side of the fence. I wonder if any other groups are prepared to respond???
My views on adviser regulation per your Blog
"I have had the opportunity to work directly in recent years under both the NZ and Australian adviser regulatory models.
In Australia the Government has mandated Superannuation for the workforce. It is a complex product especially when coming to drawdown time. Most people need advice and the government feels it needs to put a lot of emphasis on regulation of advisers as part of informing and protecting consumers.
The FSR model was designed for Australia and while it conceptually is good it has some major shortcomings in practice. In particular disclosure has often been over engineered and of little value to consumers.
In NZ there is no compelling case for an Australian type regulatory model. There is no preference like superannuation advice granted to advisers in NZ. Disclosure is good but it needs to ensure substance is not overwhelmed by form. More pages don't necessarily make better disclosure for instance.
Advisers in NZ should not be forced or compelled to join larger groups or Dealerships for pure regulatory purposes. There is not likely to be any requirement for that. Any regulation needs to also encompass other forms of investment advice like property.
In my view in NZ advisers will join larger groups for pure economic reasons and those are always the best ones.
A Dealer or larger group might offer benefits that advisers want such as
· Access to best business practice advice
· Training and development
· Compliance
· Succession planning and so on
I agree with Philip that people should not be driven by fear. That happened in Australia and it created resentment by advisers that still exists in many cases today.
I don't think any adviser who is operating a good quality business looking after his or her clients best interests has anything to fear here.
The whole picture comes down to choice really. People will join groups for their own reasons and that is the NZ way. I support that.
Jim Minto
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