tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, July 23rd, 7:18PM

News

rss
Latest Headlines

Govt seeks feedback on disclosure rules

Clients will have to be clearly told what fees they are likely to pay, and what commissions an adviser will receive, under draft disclosure regulations revealed by the Government this week.

Friday, October 11th 2019, 5:00AM 2 Comments

The Ministry of Business, Innovation and Employment (MBIE) has issued its draft regulations, seeking feedback on the disclosure requirements that will sit alongside the new financial advice regime.

The first requires any financial advice provider to keep a record of every disclosure made in accordance with the rules.

Then, as a matter of course, MBIE suggests advisers make publicly available the licensing status of their FAP – including a brief summary of any conditions that might limit the advice that can be given.

The adviser would also have to give information relating to the type of financial advice the FAP gave, products advised on and any limitations, including product providers dealt with.

They should also explain the fees that could be charged for advice, as well as any conflicts of interest, including an explanation of the circumstances in which a commission might be paid.

Advisers would also have to give information about their own internal complaints procedure and external dispute resolution process.

When the nature and scope of the advice became clear with a client, MBIE suggested advisers give the same licensing information, information about the types of advice that would be given, and products advised on, including any limitations on the process.

Advisers should also offer information regarding any recent instances of being publicly disciplined, relevant convictions or civil proceedings and, in the case of financial advisers, any recent bankruptcies or insolvencies.

MBIE said they should also give information identifying the FAP, and adviser or nominated representative. They would also give a break down of the fees to be paid, including the amount due if it was known, or an estimate if it was practicable.

They should also give a description of conflicts of interest, including any commissions or incentives that could be paid.

Finally, when advice was given, the adviser should give much of that same disclosure again, including details of fees, and commissions.

They would also have to give the client a description of their duties under the Financial Markets Conduct Act.

MBIE said feedback on the paper would help to finalise the regulations before they were submitted for approval.

"We are aiming to pass the regulations in early 2020, and they will come into force in June 2020 along with the rest of the new regulatory regime. We are also seeking feedback on whether the regulations will need to include transitional provisions to give the industry sufficient time to meet the new disclosure requirements."

Financial Advice New Zealand chief executive Katrina Shanks said increased transparency was welcome.

“Though we generally support the proposed requirements around record-keeping regarding disclosure made to clients – including on conflicts of interest on commissions and other incentives, disciplinary issues, and about what advice an adviser is licensed to provide – in our view some of them need further consideration and development, and we will be providing feedback on them.
“Many advisers, of course, already do much of this, but making it a requirement for all advisers will be a good thing for clients and for building public confidence and trust in the sector.”

You can read the paper here. Submissions close November 8.

Tags: compliance Disclosure FAP Financial Advice New Zealand Financial Markets Conduct Act FSLAA Katrina Shanks licensing MoBIE regulation

« Legislation overload 'could have unintended consequences'Couillault returns to funds business »

Special Offers

Comments from our readers

On 11 October 2019 at 1:44 pm LNF said:
End result a camel that was a horse designed by a committee
On 12 October 2019 at 2:01 pm JPHale said:
So much for MBIE’s disclose as you go and keep it simple comments to advisers in the face to face meetings. It's turned into burying clients in multiple copies of the same information they already could care less about.

I agree with the need for transparency and equality of requirements across all advisers, but for many clients the added level of multiple copies of paper created has the potential to get clients to the ’it's too hard’ point far faster than we presently see.

Client's not taking action because the process is too ’hard’ is already an issue.

Every insurance adviser already experiences this when they pull out the 40-page application and the client's roll their eyes... About the only advantage to e-apps, the client can't see how long it is until they're well into it and it's too late...

We have a ’now’ right now society and we’re adding more to the pile. Frankly, it is likely that the outcome of this is less coverage in the community or more the point the cover that is taken is more DIY or inappropriate because it's ’sold’ and doesn't have a whole lot of advice paperwork added to the burden...

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Underwriting delays for nib special offer
    “I have a significant objection to a point in this communication, and I have raised it with nib directly. "In future, please...”
    23 hours ago by JPHale
  • Cryptocurrency; Advisers wary but must evolve
    “Financial services getting into crypto right now has the typical feeling of the mum and dad investor jumping in. FOMO is...”
    2 days ago by JPHale
  • FMA report slams insurers
    “There's a gap, alright. However, the mainstream media has missed what Matthew pointed out here, the real impact on the consumer...”
    2 days ago by JPHale
  • FMA report slams insurers
    “@Murray If 95% of legitimate well established and capable business did not meet expectations, might the age old saying "they...”
    2 days ago by LNF
  • FMA report slams insurers
    “Meanwhile, in the real world, advisers are still trying to secure PI cover by the end of the month so they can remain in...”
    2 days ago by Adviser1
Subscribe Now

Weekly Wrap

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 3.10 3.50 3.84
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.50 2.90 3.24
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
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 Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.15 2.35 2.75
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 2.69 2.99 3.29
SBS Bank Special - 2.19 2.49 2.79
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - ▲2.29 - -
The Co-operative Bank - Owner Occ 4.40 ▲2.49 ▲2.89 ▲3.19
The Co-operative Bank - Standard 4.40 ▲2.99 ▲3.39 ▲3.69
TSB Bank 5.34 ▲3.30 ▲3.69 ▲4.04
TSB Special 4.54 ▲2.50 ▲2.89 ▲3.24
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 3.15 3.49 3.89
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.89 3.29
Median 4.54 2.68 2.99 3.29

Last updated: 19 July 2021 9:09am

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