|        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Sunday, May 9th, 4:50PM


Latest Headlines

FMA wants to manage advice costs

Managing costs on adviser businesses is crucial to ensure New Zealanders have access to advice when they need it, the Financial Markets Authority says.

Tuesday, February 3rd 2015, 6:00AM 1 Comment

by Susan Edmunds

The FMA’s director of compliance Elaine Campbell said it was mindful of the cost of regulation on advice businesses.

“We are aware we are a draw on financial adviser businesses,” she said. “We need to be careful about balancing that cost of compliance against the return to consumers.”

One of the FMA’s big concerns what that Kiwis who needed advice could get it, she said. “But it also needs to be sustainable from a business perspective. That’s a real challenge.”

Campbell said the regulator had engaged with the financial services sector a number of times to discuss their value proposition and how low net-worth clients could access advice.

Commentator Russell Hutchinson said it was becoming common for class advice to be offered as a substitute for personalised advice.

He pointed to banks offering limited advice on KiwiSaver transfers.

“The card on the door or the desk says that person is a financial adviser and they are but they’re a QFE adviser, they’re not doing personalised advice. They just turn around a brochure and a product disclosure statement and say on p22 is the risks, here’s our returns. There’s no advice and they avoid questions that would constitute advice.”

Campbell said it would be naive to suggest there was no risk of people not understanding the limitations on advice they were being given.

“One of the issues is that the way the legislation is set up in New Zealand includes  a degree of complexity. There’s class, personalised advice and categories of products who can provide advice on what. With complexity, there’s increasing risk.  The objective of the FAA review should be to drive more simplification.”

Campbell said there was no one silver bullet that would solve the issue of getting advice to consumers. “It plays into all the issues, commission versus fee for service… there is a mix of inputs to be considered.”

« DIMS conditions clarifiedDIMS requirement 'overkill' »

Special Offers

Comments from our readers

On 3 February 2015 at 12:59 pm traveller said:
I don't see why the FMA should interfere with the fee structures of planners, if that is what I interpret from the article. Any adviser or firm should have enough brains to work that out for themselves. If not, they shouldn't be in the business.

Sign In to add your comment



Printable version  


Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News


Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
Site by Web Developer and