by Susan Edmunds
The Ministry of Business, Innovation and Employment has released a high-level summary of the responses it received to the consumer brochure it put out about the Financial Advisers Act review issues paper.
The brochure was a simplified version of the issues paper, aimed at those who use financial adviser services.
It received 248 responses.
MBIE also received 26 letters from consumers about their experiences with financial advisers, sent in response to a newspaper column by Mary Holm.
It found almost 50% of respondents said their confidence in the professionalism and integrity of advisers had not changed since the FAA took effect.
Just 54% had at least some confidence in the professionalism and integrity of advisers.
The overwhelming feedback was that the current regime was overly complicated.
MBIE said: "The vast majority of respondents said the difference between the types of advisers was difficult to understand and/or the different requirements are inappropriate. Some respondents said the term 'registered financial adviser' suggests the adviser is more qualified than an authorised financial adviser."
Most respondents said people did not know how to find the right type of adviser and 79 per cent said commissions and other conflicts had an impact on their level of trust and confidence in financial advisers.
Adviser Peter Leitch, former president of the PAA, said clients' views of their own financial advisers were likely much more favourable than their view of advisers in general. "If you ask people about lawyers, they'll say some are good and some are bad. But if you ask them about their own they'll say 'oh she's really good'. It's the same with advisers. That's the challenge. I would hope if they did a survey of my clients they would say 'he is honest and trustworthy'."
Claire Matthews, of Massey University, said advisers had a perception problem. "During the 2000s there was a lot of talk about the problems in the financial advice sector, which would have created a perception that advisers are generally dodgy.
"More recently, what are the stories that generally get into the papers about advisers? The ones where there is an adviser who has done something wrong – fuelling that perception. We don’t hear about the advisers who are doing a fantastic job, which is most of them – you don’t get financial adviser going to the media and telling them how their adviser helped them earn X% on their investments or helped them sort out an issue because those are not the sort of things we like to talk about, but we’re happy to tell the world when we think someone has wronged us. "
She said the industry had to deal with some highly-publicised 'bad apples' and the Government telling the public the sector needed to be fixed. "And no counterbalancing arguments."
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