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Financial Advice NZ wants new govt to give advisers a breather

The main message from Financial Advice New Zealand (FANZ) to the new government is essentially “give us time to breathe.”

Tuesday, December 5th 2023, 10:26AM 4 Comments

by Jenny Ruth

Interim FANZ chief executive Tony Dench says he's pleased that the National, Act and NZ First coalition government “isn't rushing into regulatory changes.”

“What I'm really looking for is to see a considered and deliberate approach and constructive engagement with the financial sector to make sure that any revisions work well for suppliers, financial advisers and consumers,” Dench told GoodReturns.

The government has published a 49-point plan of what it intends to achieve in its first 100 days and Dench says he's pleased it doesn't include the review of the Credit Contracts and Consumer Finance Act 2003 (CCCFA) that the new government has promised.

That's despite it being one of the most complained about piece of legislation affecting the financial services industry and despite much tinkering by the previous government to try and make it more workable.

The central opposition to the CCCFA is that it was intended to capture fly-by-night-type operators but instead made it much more difficult for the mainstream banks to lend on mortgages.

Dench says his industry needs “a breathing space” after implementing so many new regulations in recent years.

“Financial advisers have completed education to achieve Level 5 qualifications and over a third of Financial Advice NZ members have gone on to achieve a Trusted Adviser accreditation,” he says.

“This provides consumers with certainty that the adviser is committed to ongoing professional development, including having completed a professional ethics workshop and has a minimum of three year's adviser experience.”

Dench didn't deny that the CCCFA is perhaps the most hated piece of legislation affecting the financial sector that was brought in by the previous government.

“Any changes that we might see from the incoming government would be better with a considered and deliberate engagement with the sector,” he says.

“That's the way to get it right for all parties.”

As well as grappling with the new education standards and other regulations, financial advisers have also been working hard for their clients “at an incredibly challenging time. The economy is very challenging for their clients at the moment,” he says.

Perhaps the item on the 49-point plan likely to affect the financial sector most is the plan to narrow the Reserve Bank's remit to focus solely on price stability, removing the requirement to aim for maximum sustainable employment.

Tags: FANZ

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Comments from our readers

On 5 December 2023 at 3:11 pm Amused said:
Reading Tony’s comments you start to gain an appreciation for why so many experienced advisers probably no longer bother belonging to an association. We have a golden opportunity before us now with this new Government to make a positive change in the financial advice industry and this is the stance from the interim FANZ chief executive. For organisations like FANZ to remain relevant they need to be demonstrating to the adviser community they are actually in our corner on the subject of regulation. I don’t get that impression sorry from what Tony has been quoted as saying here.

Tony should be straight out of the gates telling David Seymour the new Minister of Regulation that FSLAA was a complete overreaction from the previous lawmakers and regulators. He should be showing him there are but a handful of complaints being made annually against advisers and most of these relate to provider clawback of adviser commissions. He should be explaining in detail the damage that has been done in terms of experienced advisers exiting the industry early and the roadblocks that have being put in front of consumers wishing to access financial advice and the hoops that advisers have to go through now when providing it. One only has to evidence to the Minister the carnage done to Aussie consumers across the Tasman to see what happens when you overregulate a financial services industry.

Instead of giving the industry “time to breathe” advisers want to see some quick action taken by this new Government in terms of repealing some of the many boxes that we are now forced to tick. Advisers just want to get back to their job of providing advice to clients without worrying about whether we need to take time away from our businesses to keep someone gainfully employed at a Government Department in Wellington. Much of the regulatory changes introduced to the industry over the past 2 years seem to have more to do with box ticking than achieving any benefit whatsoever to consumers. This is a subject I know David Seymour will be very hot on in his new role as Minister of Regulation.

There is also a clear example of a conflict of interest happening right now in the industry regarding the proposed changes to the NZCFS Level 5, currently under review by the education providers themselves. What is FANZ and other associations stance on this? This is an example of where FANZ could be demonstrating real value to the industry in raising this issue with the new Government but I haven’t heard boo out of any of them that I am aware of?

FANZ and other associations that talk about being “in our corner” need to start do doing just that. Perhaps then membership might start to demonstrate some added value again to advisers. Respectfully NZ consumers don’t need their adviser to have “trusted adviser” sticker on their email signature to want to deal with them. Mortgage advisers now all collectively write up to 60% of some banks home loan business and we got there thank you without any assistance from associations. Clearly consumers in New Zealand already trust mortgage advisers.
On 6 December 2023 at 10:12 am Accord said:
Well said amused if there ever was a set of regulations imposed that ha no direct benefit to clients then this is it. All it has done is create an industry of regulators and course providers adding little value to clients who an jump online and do it themsleves.
On 6 December 2023 at 11:49 am Do what is right said:
I agree again with Amused. Taking a sledge hammer to fix a small few issues has been very destructive of the advisory industry. I heard that FMA now employ 200 people! That is an example of a very fat Government agency designed to repair a small hole.
We need our association to fight for us, not to be a meek compliant child. Allowing us "to breath" sounds like an excuse to do turn up at work and do nothing.

An issue that Tony may like to take on in his spare time while taking a breather, is driving a change in insurance company behaviour where a client asks an adviser to manage their needs but all remuneration vests with the original writer. How do policy holders get service under the new regime where an adviser is asked to take full accountability and responsibility while the adviser who wrote the policy gets paid for doing nothing.
Surely, under the new regulations, this out of date set of rules must surely be able to be revisited? It is the rule that drives churn set by insurers asking advisers to churn. I think we have grown up to a point where this can be re-examined.
On 8 December 2023 at 5:35 pm Backstage said:
I also agree with amused. Its game on now and hopefully if this government can get the economy back on track we will have less clients having to reduce or cancel covers. I think the brightline and rising interests rates had more impact than the silly CCCFA.

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