Wilson indicates Govt moving more quickly on adviser regulation
In her first speech on financial adviser regulation Commerce Minister Margaret Wilson says further controls look set to come earlier than expected.
Tuesday, June 22nd 2004, 3:40PM
by Rob Hosking
“We were thinking it would be next year, probably in the middle of the year,” she said. “It’s an issue that is raised all the time now, most notably in the recent IMF report.”
“I’m trying to assess whether we should be bringing it forward, although I haven’t made that decision yet.”
It is understood however that a speeded up process of reform is now highly likely. The government was planning to put up a draft bill later in the year for consultation with the industry, before formally introducing it to Parliament.
Wilson said the government is already consulting with the advisory industry and that there was little point in dragging the issue on too long.
“You can consult people to death and nothing seems to change. We should be able to put a process in place that doesn't take too long.”
Wilson also said there is no intention, as some in the industry have feared, of importing the Australian system of financial regulation “holus bolus”.
“We are a very different market, a much smaller market, and we would have to consider which features might work here and which would not.”
The new Australian regime, which came into force in March, has been highly controversial, with widespread reports of some financial advisers shutting up shop completely because of the costs of complying with the new rules.
Wilson says officials are studying the Australian system closely but suggested New Zealand could learn from the mistakes made, and also that the New Zealand market is a very different one.
The Australian regime was brought in after highly publicised market failures, Wilson says, as were recent changes to US financial market regulation.
That is not the case in New Zealand, she says, and she sees that as a positive.
“I’m quite keen for us to get on and [improve financial sector regulation] at a time when everyone is not terrified to death.”
Many issues are still to be dealt with, she says, including the extent to which life insurance policies would be included in any financial advisers regime; enforcement issues; training standards for the industry; and definition of terms such as “investment” and “adviser”.
On the subject of licensing, Wilson indicated an open mind, but observed that, with a number of different bodies purporting to represent the industry, a licensing regime has the virtue of simplicity. The alternative is to choose which body is to have self-regulation powers, such as the Law Society or the Institute of Chartered Accountants has over the legal and accountancy professions.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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