Commissions, scope of advice, convictions among disclosure requirements

Kris Faafoi

The paper, addressed to the Cabinet Economic Development Committee from Commerce Minister Kris Faafoi and agreed by the Government, notes that disclosure should be useful to clients and flexible enough to work in a range of advice scenarios.

It says advisers should disclose the licence they operate under, the conduct and client care duties they are subject to, the types of advice they can provide, any commissions, incentives or conflicts of interest that could be perceived to impact the advice, any fees or costs associated with the advice, recent enforcement action against the adviser, and the complaints handling process.

"Rather than including all of this information in a single template given up-front to the client, which is the current approach and is ineffective, I propose that different pieces of information be given as it becomes relevant to the client at certain points in the advice process. 

"Recognising the range of different types of financial advice that will be covered by the regime, I also propose that the regulations provide some flexibility in terms of precisely how this disclosure is provided. This will ensure that clients are able to receive effective disclosure, regardless of how they choose to access financial advice."