Advisers concerns heard, Goldsmith says
Advisers’ concerns about the impact of regulation on the viability of their business have been noted, the new Commerce Minister says.
Wednesday, January 28th 2015, 6:00AM
by Susan Edmunds
Paul Goldsmith said he was aware of the business pressure increasing regulation was putting on financial advisers and that would be part of the review of the Financial Advisers Act this year.
Goldsmith, who took over from Craig Foss after the election, said he had been talking to a range of people across the financial services sector and had heard that the administrative burden of regulation was significant, particularly for advisers who operated small businesses.
“One of the consequences [of regulation] has been that less there’s financial advice on offer particularly for people with smaller amounts of investable funds. People talk about a threshold under which it’s just not worth the effort,” he said.
Goldsmith expects an issues paper for the review of the Financial Advisers Act to be available for submissions by the middle of the year.
He said one of the aims of the review would be to make sure that there had not been an unintended consequence of regulation making it harder for people to access advice.
“That’s a focus for the review, have we got that right, are there ways we can achieve a good result around confidence and disclosure without being quite so burdensome? I think there’s a reasonable question to ask."
Any regulation had to balance the desire to protect vulnerable people and not add unnecessarily large costs to the industry, he said. “There’s no magic to it, if you add costs to anything ultimately they filter through to consumers and so we walk that line every day. I’ll certainly be challenging that over the next few years, making sure we’re not adding unnecessary costs. I’m very much looking forward to the review coming up, to look for practical ways to achieve our ends and very keen to listen to the concerns of everyone.”
Goldsmith said it was important that regulation was reviewed regularly and a review of the FAA was timely.
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