I agree with the "prevalence-induced" concept. It is definitely not Advisers re-defining what we're seeing or over-reacting to the "maturing" of regulation. The concept Steve put forward suggests that as the problem becomes less frequent, the criteria used to define the problem expands, resulting in lesser problems being treated like greater problems. The root of the regulations we have is based in answering questions nobody asked, addressing problems Advisers did not cause. Such as blaming investment advisers for the losses direct investors took from finance company collapses, or allowing lobbyists to succeed in defining BEOT VIOs' sales processes as "advice". So from the beginning - 2011 onwards - there has been so little prevalence of problematic advisers causing terrible outcomes through faulty advice processes that it does appear that the regulators are defining lesser problems as greater. Paul – the “rules” are not rules. Everyone knows what a forward pass is, and we all know that a whiskey still counts as a stroke. Our regulations are mostly principles supported by vague guidance notes. You have correctly pointed out that there has been a lighter touch at times, and perhaps a sledgehammer at other times. To a FAP owner that looks like inconsistency. With no clear safe zone, just vague principles to abide by, and watching patchy and inconsistent enforcement, FAPs have taken an approach to documentation and processes that are now being criticised by the same people who won’t set a bar. But they will say we’re jumping too dam high. “Size it right” is an insulting suggestion from someone who won’t say what the right size is. Recall people like Brent Sheather and Murray Weatherston openly and rightfully questioning what on earth was the problem these regulators and regulations were meant to solve? Recall also their criticism of the revolving door between the regulator and the regulated. If it feels like they are moving the goal posts it’s because they are starting to approach molehills with climbing gear. The hills are the same size. And they were never that big.

Paul Flood: The danger is that the 'goalposts' (regarding what is acceptable or unacceptable adviser conduct) may be susceptible to change. Our 'Principles based' legal/regulatory environment lends itself to “prevalence-induced concept change” over time, perhaps not so much in the written laws and Code, as in the interpretation of the prescribed principles.

Just a tip, if you use more than six, six letter words in a sentence you lose most Kiwi's. So avoid client/adviser confusion when writing your post or article if you would like it read and understood. Ironically, my last sentence was not likely read.