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Consultation fatigue hits advisers

New Zealand’s financial services sector is suffering “consultation fatigue” and there’s still a way to go before the new regime is formalised.

Thursday, June 7th 2018, 6:00AM 5 Comments

by Susan Edmunds

Murray Weatherston, of SiFA and the Stakeholders Engagement Group, said the long list of consultation the industry had worked through in recent months had taken its toll.

Submissions have been sought on the Financial Services Legislation Amendment Bill by MBIE and the select committee considering it, on disclosure by MBIE, on insurance law by MBIE,  on the proposals for the new code of conduct by the code working group, on the future of tax policy by the tax working group and by the FMA on various topics.

Weatherston said those who had something they wanted to say would have put in the effort to make sure a submission was on record.

“But clearly there’s consultation fatigue,” he said.

“We have to work to their timetable, we are not allowed to make our own. Maybe we would have done it differently but it’s not us making the decisions.”

He said it was complicated by the various regulatory bodies being unwilling to issue a view on anything other than their own patch.

“The slowness of the procedure makes it harder. If a business decision was being made you wouldn’t mess around for five years. We’re over 3.5 years into this journey now and not at the finishing point. They’ve moved the goalposts later and later."

IFA chef executive Fred Dodds said there had been a lot of consultation but most of it was now over for financial advisers. “People are now waiting to find out, what do I need to do to get licensed, to prove competence, to tell clients about conflicts of interest?”

Rob Dowler, formerly head of the Securities Industry Association, and now operating as an independent consultant, said it was an obvious concern that the number of consultation procedures might suggest it was difficult for entities to engage and have appropriate input.

A spokeswoman for MBIE said its managers met regularly with financial service sector organisations. “There is a high degree of interest and engagement in the work programme. Formal consultation is supported by ongoing informal discussion between the sector and MBIE staff.”

Tags: FSLAB

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Comments from our readers

On 8 June 2018 at 9:27 am dcwhyte said:
Not just fatigue - a few contributors have made the point that making a submission is pointless as MBIE officials have already decided the outcome. Some minor tinkering around the periphery perhaps, but let's wait and see. For example, over a third of the submissions to FSLAB made reference to differentiating between product sales and financial advice. My money is on this being ignored when the final wording is presented to the Minister. Constant references to consultation with the industry make for good rhetoric and reporting, but if the content of the consultation is ignored - what's the point?
On 8 June 2018 at 9:48 am Brent Sheather said:
Well said dcwhyte. My view is that the MBIE have been captured by industry and want to keep their employment options open.
On 8 June 2018 at 9:57 am Murray Weatherston said:
Can I add to the chorus - a great point David.
I have been involved in making SIFA's submissions since at least 2008. In baseball terms, I think we are batting 0.0010. The 0.0010 was all scored with David ireland's Code Committee in the 3rd version which accepted our many times repeated submissions on limited advice.
Its hard to understand how we could have been completely wrong on all the rest.
I am sure somebody will respond with the Einstein insanity quote - and ask "why didn't you give up long ago."Good question.
On 8 June 2018 at 11:39 am Brent Sheather said:
The sad thing is that the MBIE is not only captured but are incompetent as evidenced by the fact that each year there is the need to fix last year's mistakes.
On 8 June 2018 at 4:42 pm dcwhyte said:
Not just MBIE Brent, as witnessed in Shoeshine article in NBR today where Rob Everett consigns Kiwi consumers to suffer the same fate as Australians with VIOs given free rein to carry on business as usual with his blessing. It seems the regulatory structure is in thrall to the BEOT and the rest of us, including our clients, have to foot the bill.

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