Commerce Minister Kris Faafoi
Commerce Minister Kris Faafoi
I made a prediction a while back that the Financial Services Legislation Amendment Bill (FSLAB) will become law sooner than many people in the industry expect. This week gives me some belief that this will become true.
At the start of the week the bill was number 20 on the order paper, by Wednesday morning it was number two and by Wednesday night Parliament had unanimously passed it through its second reason. Yesterday it was back on the Order Paper at number 16.
The fact that all parties supported the bill, it was introduced to Parliament by National and then was picked up by the new administration all show signs that its progress will be swift. Added to that Commerce Minister Kris Faafoi seems determined to get it passed.
Listening to MPs debate the bill on Wednesday night was interesting. The issues which most concerned advisers; sales v advice and vertical integration, were barely mentioned. When it was they MP speaking thought the bill had the balance right. A theme from speakers was their support of roboadvice, or advice given by a non-natural person.
Perhaps the most informed speech was from Labour MP Michael Wood [WATCH it here].
Surprisingly, two of the poorer speeches came from the two ministers who had control of the bill when it was in National's hands.
Some people have said to me that they don't know enough about what the new regulations will look like and they are concerned that there will be sweeping 11th hour changes like what happened when the Financial Advisers Act was passed. I say bollocks to the first worry and it's highly unlikely with the second scenario.
What I do think will happen is that there will be sweeping changes to the shape and structure of the financial advice landscape. Apparently this is an unintended consequence of the bill, but it seems a reality.
My prediction is there will be a "land grab" in the group space with many different and new offerings. We're already seeing it. The old TOWER Financial Advisers group is reborn. In the next issue of TMM we reveal a new mortgage aggregation group and next week we will have a couple of other stories to support this prediction.
A surprise this week is that our story suggesting cypto currencies (eg: Bitcoin and the likes) will be the first new asset class in hundreds of years didn't garner much response. My interview with Ark Investments CEO Catherine Woods was interesting.
Here's a pretty influential fund manager in the US making a prediction which many would struggle with. Whether she is right or not will be good to watch over the years.
A discussion I had yesterday was around what level of service will advisers have to do under the laws? It's a fascinating question and may indeed turn out to be a massive issue.
To help give you some context to this question have a read of our most commented on story this week. It's about a decision from the Insurance and Financial Services Ombudsman which should worry advisers.
Also please read the comments.
And for something a little different we have published a list of people who have met with the Minister of Commerce in the last quarter. It's an interesting read here.
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