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QFEs call for simplification

New Zealand’s qualifying financial entities (QFEs) want to see some simplification of regulation when the Financial Advisers Act is reviewed.

Thursday, December 18th 2014, 6:00AM 4 Comments

by Susan Edmunds

AMP and the FMA recently hosted the first QFE Round Table, with representatives from 46 QFEs around the country and 10 FMA members from the compliance division.

AMP said the purpose of the forum was to discuss emerging issues for QFEs and provide an opportunity for QFEs to get together to discuss with the FMA, the common themes arising in their businesses. .

AMP executive legal counsel Therese Singleton said: “With an increasing regulatory regime across the financial services industry, it was likely that all the QFEs across New Zealand were experiencing many of the same issues.  We thought there would be an immense opportunity, and indeed benefit, by bringing together all the QFEs to discuss the issues we are facing, identify constructive solutions and provide a consolidated industry-wide response to the FMA.”

She said the meeting discussed what input QFE industry participants should have in the review of the FAA. It was an opportunity to create a united view that would have input on any changes that might come about, she said.

Singleton said most QFEs were supportive of the QFE concept and most worked well with the FMA. But she said there was a desire to maximise the consumer benefit and understanding of the regime.

She said having three types of advisers – RFA, AFA and QFE – was confusing for people within the industry – “let alone consumers. That’s one thing that we’d definitely like simplified.”

She said while QFEs ranged from organisations such as Harvey Norman through to AMP, they shared a common goal of more consumer protection. “There may be nuances but everyone generally believes what is better for consumers is better for the industry.”

FMA director of compliance Elaine Campbell said: “QFEs are one of the many sectors that are now within our regulatory mandate. We’re pleased to support initiatives like the QFE Round Table. This is an excellent forum for discussing a wide range of issues in an informal and constructive setting that helps maintain an open relationship for us and the sector.”

The Round Table will next meet in March, hosted by Westpac.

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Comments from our readers

On 18 December 2014 at 11:27 am R1 said:
I would hope that there will be a high degree of transparency around these sorts of meetings and what QFE's input to the review process is available for debate. Why not open meetings to all groups and allow RFAs, AFA & QFE to share the same forum and have some debate about the pros and cons of ideas put forward. An exclusive meeting with a collective of QFEs sounds a lot like a lobby group meeting. With the cynicism about how the QFEs captured the process of regulation early on and being over-represented in the governance of the industry this would help to allay those concerns and help (re-)build confidence of all 'players', including investors/consumers.
On 18 December 2014 at 2:40 pm Brent Sheather said:
Good stuff R1. There is far too much movement between QFEs/the FMA/the government. Way too cosy and this sort of thing happens overseas too ie the New York Fed and Goldman Sachs.

Regards
Brent Sheather
On 18 December 2014 at 8:09 pm w k said:
Of course RFA/AFA/QFE is confusing. This will be the umpteenth time this has been suggested.
1. Qualification for each category of biz adviser is practicing - ie., one for life & health, one for f&g, one for investments, etc.
2. Advisers to be licence according their type of practice.
3. Licence are held individually, ie. one cannot sell/give advice without without the necessary qualification/s even working for big orgn. Just like accountants, lawyers and doctors, the accounting, law or medical practice don't hold the practicing certificate, the individual does.
Therefore, bank frontline staff can only sell/advice on the respective product/s if they are licence NOT because they work for the bank. This is what I call a level playing field.
On 19 December 2014 at 4:24 pm I was wondering said:
I believe that all advisers should personally be registered or licensed for the services that they provide. Whether working in a bank or in a private capacity, no exceptions and none of this blanket QFE nonsense. Only two classifications are required. AFA for financial investment, advice including KiwiSaver products and insurance and RFA for insurance only. Simple.
Well said R1 and Brent

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