Banks sing same tune on disclosure statements

Disclosure statements for authorised financial advisers should tell customers what they are able to sell rather than focus on what they are not allowed to under new regulations, according to the banks.

Friday, October 9th 2009, 5:10AM

by Paul McBeth

ANZ National Bank, ASB, Westpac and Kiwibank say that it would be more beneficial to customers if they know what products and services authorised advisers can offer in their submissions to the Ministry of Economic Development's discussion document on disclosure regulations under the Financial Advisers Act.

Because the term "authorised" is unlikely to mean anything to a customer, it is "important that the guiding statement provide all necessary information about the nature of the services and products that can be provided," Kiwibank said in its submission.

ASB went further saying any references to "limitations" could diminish clients' confidence in the legislation, and that the disclosure documents should focus on what can be offered to provide a "more reassuring and positive spin."

ANZ National said advisers should be able to express what they can offer, though it did not believe it should have to rely on a prescribed list, as that could cause delays when new products hit the market but require regulation before they are able to be sold.

Westpac agreed with the other banks, but was in favour of using a generic list with broad terms, such as unit trusts, superannuation schemes and life insurance.

BNZ did not have a submission available on the MED website, and was unavailable to confirm whether the bank had made commented on the discussion document.

Paul is a staff writer for Good Returns based in Wellington.

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