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

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Monday, September 21st, 9:54AM


Latest Headlines

More time needed for new rules

Ministry of Business, Innovation and Employment officials have been told they may not be giving the financial advice industry enough time to transition to new legislation.

Tuesday, May 23rd 2017, 6:00AM

by Susan Edmunds

The release of the Financial Services Legislation Amendment Bill exposure draft outlined a timeline for the new regime. It was expected that the new Code of Conduct would be approved by August next year. The proposed new regime would take effect six months later, at the start of 2019.

Existing industry participants would have another two years to meet any new competence, knowledge and skill standards. In that time they would be able to carry on providing the services they were already able to provide.

It was also suggested that it could be possible for AFAs to be made exempt for five years from meeting the new competence, knoweldge and skill standards because they had already completed the level five certificate. Another option suggested was that AFAs and RFAs be allowed to demonstrate competence through  testing and client file reviews, if they had been working for 10 years.

But submitters on the draft raised concerns about the proposals. MBIE has made public their submissions.

Adviser Graeme Lindsay said six months would not be sufficient time for the larger providers to shift to a transitional license, once the code was approved. “I suggest that the timeframe should be set at 12 months. As the proposed six months includes December and January, in effect it is really only four months.”

Claire Matthews, Michael Naylor and Janine Scott of Massey University agreed it was too short a time.

“Based on the experience around the FAA 2008—registration and so on—it is not practical for licensing authorities to issue licenses within this time frame, as the project time period includes upcoming holidays. There should be some mechanism included to ensure that there is a transition of participants across the transitional period, so that it’s not left to do at the last minute.”

Ross Sheerin, of Trustees Executors, said flexibility would be needed. “I think the proposed timeframe for code development looks ambitious as does the expectation for the bill to be passed before the general elections. I would expect dates in the consultation paper will need to be reviewed and reset well in advance as soon as some lag looks evident.”

Some form of safe harbour would be necessary, he said, to ensure advice services remained available to the public but it needed to be implemented properly. "I think there needs to be some additional thought given to the issue where new staff can be taken on under the safe harbour provisions, especially where firms are not QFEs. There can be quite a lead time to qualify staff through to (what are presently unknown) minimum competence standards.”

Adviser Ron Flood said it was unfair that as currently written, only AFAs would benefit from the potential five-year exemption. “There is an assumption that only AFAs have qualifications that can qualify them for an exemption period. Many RFAs have the Level 5 Certificate of a Graduate Diploma that could also qualify them for an exemption period. With regards competency assessments, if these are to be restricted to advisers with 10 or more years’ experience it will fail to recognise those newer advisers who took the time to gain suitable, relevant qualifications. I suggest this threshold also include advisers with five or more years’ experience who have obtained a recognised qualification.”

Share said the proposed safe harbour could mean that some older advisers would continue doing what they were doing until 2021 when they would opt to leave the industry.

MBIE said it would now review the submissions it had received and make any necessary changes to the bill.

Tags: Financial Markets Conduct Act

« Lifetime lowers investment barLVR restrictions to be reviewed »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment



Printable version  


Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News


Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 3.85 3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 ▼2.45 2.65 2.79
Kainga Ora 4.43 2.93 3.07 3.24
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
SBS Bank 4.54 3.05 3.19 3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.55 2.69 2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 3.29
TSB Bank 5.34 3.29 3.45 3.59
TSB Special 4.54 2.49 2.65 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.15 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.00 3.13 3.02

Last updated: 21 September 2020 10:48am

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