Financial Markets (Conduct Of Institutions) Amendment Bill Back From Select Committee

Financial Advice New Zealand is pleased some of the changes they recommended were amended during the Select Committee process but noted there is room to debate outstanding issues in the House.

Chief Executive Katrina Shanks says they are supportive of the principle of the bill, improving customers’ access to quality financial products and services.

“Financial Advice NZ provided a comprehensive submission on the bill, and at first look many of these points have been picked up in the amended bill which has been referred back to the House for the second reading after the election,” she said.

“The focus of Financial Advice NZ’s submission was to exclude financial advisers and financial advice providers from the Fair Conduct Programme in the first instance. Financial advisers’ conduct is already regulated under the Financial Services Legislation Amendment Act, which comes into effect in March 2021. We are pleased to see this recognised, and for this amended bill to concentrate on the conduct of Financial Institutions.

“We are also pleased to see the commencement of the bill has been extended for another year, the definition of fairness has been given more detail, and the claims process has been explicitly removed from the bill.

“We had been concerned that the bill contained wide reaching powers to regulate remuneration for advisers and while we would have liked to see these removed from the bill, we acknowledge the amended bill has now been strengthened to ensure there are safeguards around this.

“We are pleased to see financial advisers have been removed from the duties of the bill which means they do not have to abide by the Fair Conduct Programme as they have their own conduct regime. However, they have been included via s446M in that financial institutions have to consider training and supervision for financial advisers, as intermediaries. This is an area we will be seeking further consideration.

Financial advisers play an important role in increasing New Zealanders’ financial health, wealth and well-being every day.

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