Financial advice commissions not under threat: Faafoi

CoFI is working its way through Parliament and there has been concern that it creates conduct requirements for financial advisers, on top of those introduced by FSLAA and the new code of conduct for financial advisers.

In a webinar with Financial Advice NZ, Faafoi acknowledged that concern and said he did not want the conduct regime to add another layer of complexity of regulation on top for advisers.

The bill in its current form also allows regulations to dictate remuneration structures, which some industry participants have expressed concern about.

Faafoi said Government recognised that commissions were a legitimate way of paying advisers for their “important work” because consumers were generally unwilling to pay for financial advice. He said the Government was aware that commission structures were the way the sector had operated for decades.