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Power delays introduction of stricter regime for Financial Advisors

Power delays introduction of stricter regime for Financial Advisors

Commerce Minister Simon Power has announced that financial advisers will be given until June 30 next year to retrain and be authorised by the Securities Commission, although they will still have to be registered under the Financial Service Providers Act December 1. "I have listened to the concerns of the industry about the importance of there being enough time for individuals and companies to go through the authorisation and education process," Power said in a speech to an awards dinner for the Institute of Finance Professionals New Zealand (INFINZ). “The industry has advised me this will give sufficient time for these elements to be completed. This regime is essential if we are to have a financial adviser sector which mum and dad investors and investment product providers can have confidence in,” Power said. Mr Power said he expected to make further announcements soon on the treatment of advice to wholesale clients, generic advice often issued by institutions rather than individuals, and how the regime deals with group corporate structures. Here are the question and answer briefing notes sent by Power's office below:

What will Financial Advisers have to do by December 2010 to comply with the regime? All financial service providers, including financial advisers, will have to be registered and be a member of an approved dispute resolution scheme. Financial advisers will also have to have submitted their applications for authorisation (or in the case of a QFE, have submitted their applications for QFE status) and started undertaking any training necessary. What will Financial Advisers have to do by June 2010? Financial Advisers wanting to provide financial advice on securities or wanting to provide financial planning services will have to have completed all necessary training and be authorised by June 2010. Similarly organisations seeking QFE status will have to be approved by June 2010. Any entity or individual wanting to provide advice after this time will need to do so in full compliance with the law. When will the Financial Service Providers (Pre-Implementation Adjustments) Bill and the Code of Conduct for Financial Advisers be finalised? It is expected that both the code and the bill will be finalised by July this year. Once the regime is in place, it is expected that advisers will be able to begin engaging more actively with the regime. How will the ‘pathway to compliance’ impact on other financial service providers? Financial service providers who do not provide financial advice will need to be registered and be a member of an approved dispute resolution scheme by December 2010. If a financial service provider is not registered or has not become a member of a dispute resolution scheme by this time, they will not be permitted to continue providing those financial services.

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