[Weekly Wrap] Let's not follow Australia
New Zealand advisers should be watching what is happening across the Tasman with more than just a curious interest.
Monday, December 8th 2014, 7:29AM 
4 Comments
There seems to be this idea that there should be Trans-Tasman harmonisation of regulations around financial markets including advice.
However, it is pretty clear that the Australian's haven't mastered this area. There is a recognition that their model hasn't worked, hence the FoFA (Future of Financial Advice) review that the politicians couldn't agree on.
Yesterday the David Murray-led Financial Systems Inquiry (FSI) released its final report. Out of the 44 formal recommendations these two will interest advisers in New Zealand.
Align the interests of financial firms and consumers
Better align the interests of financial firms with those of consumers by raising industry standards, enhancing the power to ban individuals from management and ensuring remuneration structures in life insurance and stockbroking do not affect the quality of financial advice.
Raise the competency of advisers
Raise the competency of financial advice providers and introduce an enhanced register of advisers.
And if you want more evidence the Australian way doesn't work you just have to read this story. I call it a "holy crap moment" for advisers.
However I don't believe for a moment that New Zealand has the problems Australia has. What's more it seems advisers in New Zealand aren't interested in harmonisation. A good example is a straw poll taken a the recent SiFA conference. None of the advisers there had any interest in doing business in Australia.
While we seem to have this idea that following Australia is sensible, it is worth noting that in some areas, particularly superannuation, Australia is looking across the ditch and what we do, especially with KiwiSaver.
Another story which caught my attention last week came from listening to Pathfinder's John Berry at the SiFA conference. There he gave an excellent presentation on performance fees. You can read more about it here.
This morning NZX announced that it had bought the SuperLife business run by Michael Chamberlain. This will be of much interest to advisers out there who use passive funds. For more on this story click here.
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Comments from our readers
Where we went wrong was the carve-out for banks. The FMA has taken notice that banks are a problem.
The FSI report does put NZ advisers on notice that the days of AFA competency set at level 5 and high upfront commissions are numbered.
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