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New legislation may give advice industry new life

The financial advice industry is well-positioned for growth, if it is willing to make changes.

Wednesday, August 16th 2017, 6:00AM 2 Comments

by Susan Edmunds

That’s according to David Boyle, group manager of investor education at the Commission for Financial Capability.

He spoke at this year’s National Advisers Conference.

He said the Financial Services Legislation Amendment Bill, which repeals the Financial Advisers Act, and the new code of conduct that would come with it, were opportunities for advisers.

“I genuinely believe that the advice industry has got so much potential to grow under the new legislation.  Just not as we know it today.”

The number of New Zealanders aged over 65 would double to 1.4 million in the next 30 years, he said. People would need help to make sure that their money lasted as long as they did.

Advisers in future would need to be able to offer advice that dealt with a specific need for a client, he said, as well as providing complete financial plans. The new rules would help to facilitate that.

“Once the new legislation comes into play it will give IFAs outside the bank the ability to provide a service that is specific to the needs of the clients.”

Instead of dealing with making lump sum assets last in retirement, advisers would need to help clients build their assets before they got there, he said.

Asset allocation had been a consistent theme throughout the evolution of the advice sector, he said. Now there were increasing opportunities to help clients make sure their fund choice within KiwiSaver was correct.

“The biggest role advisers play in client success is keeping them in when markets are down. It’s natural to want to get out, that needs to be managed and technology may be able to assist with that.”

Advisers who were willing to adapt as new advice models became available would see huge opportunities for growth, he said. 

"The face-to-face model is not dead but it can't be the only solution going forward to get the reach we need so more New Zealanders are in a better position."

As clients' needs became more complex, they would look to human advice, he said.

“Some advisers might need to change their models. People say there’s no money in KiwiSaver and there might not be if you’ve got to spend a couple of hours with a client to make sure they’ve got everything right before you offer the right provider or the right fund. But the new legislation provides an opportunity for advisers not to have to invest that much time.”

 

Tags: Commission for Financial Capability conduct David Boyle financial advisers Financial Advisers Act Financial Services Legislation Amendment Bill IFA KiwiSaver retirement

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Comments from our readers

On 16 August 2017 at 8:50 am AFA Muggins said:
I always find it fascinating, how highly salaried, non practitioners are so willing to tell entrepreneurial self employed people how well off they are and how they should run their businesses, never having been there themselves.
Reminds me of a statement from Helen Clark once, where she talked about raising children, and a reporter pointed out that she didn't have any so had no idea what it was like, and her response was that she didn't need to have them to know what it was like raising them..........
On 16 August 2017 at 3:49 pm Murray Weatherston said:
Hear hear!
Very well said AFA Muggins

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