Adviser regulation to go to Govt

Tukituki MP Rick Barker has made financial planners and investment advisers an offer they can't refuse - that's if they want to regulate their industry.

Friday, April 28th 2000, 12:00AM

Tukituki MP Rick Barker has made financial planners and investment advisers an offer they can't refuse - that's if they want to regulate their industry.

Barker has offered to sponsor a members bill in Parliament to introduce compulsory adviser registration.

The offer is significant as, besides being a Labour MP, he is the party's senior whip.

Barker's offer to sponsor a bill was made, quite unexpectedly, to a branch meeting of the Financial Planners and Investment Advisers Association in Hawkes Bay recently.

He says the matter of registration is now in hands of the advisers: "The challenge has now been put out to (advisers) and they will have to give it some serious thought."

Barker says he is not taking a position on the regulation issue, rather he is prepared to sponsor the bill to assist the industry. He says it appeared the industry was in a cul-de-sac and this was something he could do to help it move forward.

The offer doesn't come without catches though.

The industry will have to get an appropriate bill drafted that will be sufficiently robust to survive a select committee hearing. While the cost is unknown at this stage it is understood such work doesn't come cheaply.

Secondly, there needs to be majority support from the advisory industry for registration.

Barker says that if the industry is divided on the issue then advisers will have difficulty convincing government that it should regulate.

Thirdly, the Government has to find time in its legislative programme to deal with the proposed bill.

Barker says registration of the advisory industry isn't a high priority for the Government. However, if it's something the industry wants badly enough to put the time and effort into producing a draft bill he will sponsor it and help get it into the legislative programme.

FPIA president Andrew Charles is supportive of the offer. He says the issue will be fully discussed at the next board meeting on May 11.

His preference is that a system is set up where fund managers only distribute their products through intermediaries who are members of a professional association that has means to police its members.

"I think we can come up with the skeleton (of a bill) pretty rapidly," he says.

Fellow FPIA board member Paul O'Brien says Barker's offer is one the industry should take up. He says if advisers aren't proactive in managing the regulation issue, it is highly likely a law will be imposed on them which they don't like.

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