Game on for financial advisers

Advisers acquired their "ticket to the game" six years ago when the government chose to regulate their sector. They've played their first game and are about to find out what the rules for the next game game will be. 

Tuesday, March 3rd 2015, 3:53PM

by Philip Macalister

Actually that's a total exaggeration to say advisers are about to find out what the rules are. Today the Minister of Commerce released the Terms of Reference (ToR) for the review of the Financial Advisers Act.

Overall the document is pretty high level (maybe like a drone over a World Cup cricket game?). However it is clear this is going to be a long and slow process.

There are five stages which take the process right through to July 1, next year which is the statutory deadline for a report to the minister. (Who knows what will happen after that is filed?)

The ToR document held no specifics. For instance topics like designations and professional development requirements don't get a mention - and don't expect to hear about them for some time.

However, it may surprise some to learn that the review will also address the registration process and the status and role of the external disputes resolution schemes.

The most striking thing in a not particularly striking ToR are that the initial focus of the review will be "updating our understanding of the role of financial advice and financial service provider registration and dispute resolution in improving the financial outcomes for New Zealanders." 

It goes on to say "this understanding will help us to test and update the objectives of, and rationale for, government intervention in this area."

The first three stages of the review are about research, issues identification and a report to the minister. After that, in November, options will be identified.

Clearly there are some issues which do need addressing and, arguably, the most contentious will be the status of AFAs, RFAs and QFEs.

What the release of the Terms of Reference signal is that Paul Goldsmith has blown the whistle for the next game to start.

What sort of ticket will you need to play the game in the future?

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