Financial advisers should get Budget boost: Shanks

Funded financial planning advice should be included in this year’s Budget, Financial Advice New Zealand chief executive Katrina Shanks says.

Thursday, May 7th 2020, 9:29PM

Finance Minister Grant Robertson will unveil the Budget next week – it will form the next part of the Government’s economic response to the Covid-19 outbreak.

Shanks said the pandemic had put New Zealanders under a lot of financial stress, due to reduction in hours of employment, the loss of jobs or pipeline of work, and changes to their business models.

There was also a longer-term impact on retirement funds and planning.

“We would like to see the Government provide financial assistance to New Zealanders and their businesses in a number of ways, including a mechanism that supports the provision of free financial planning advice. We need a positive statement of intent that supports people with their recovery in a structured and measurable way.

“Financial resilience means that people and businesses have choices when unexpected events occur such as Covid-19. We would like to see the Government invest in a financial literacy marketing campaign and stress the importance of financial planning and financial protection. This widens the safety net, with individuals being able to take control of their wellbeing and financial security.”

She said the financial advice sector would be significantly affected by Covid-19 and the resulting economic disruption.

“Financial advisers are impacted now with the inability to secure new business. In addition to this we will see greater financial pressure on New Zealanders through loss of income both for businesses and individuals [they'll be] making decisions to either reduce costs through a reduction in insurances or change in mortgages – there will be a flow-on effect on advisers' cashflows through provider clawbacks.

“The impact of these decisions are not necessarily immediate but will be more prevalent when mortgage and insurance premium holidays expire.

“Due to the lag of the financial impact on financial advisers, we would like to see additional cash available through the SME initiatives; this allows more opex expenses to be covered for the next six months. In addition to this, we would like to see an extension to the wage subsidy for six months to allow for businesses to continue employment of staff.”

There should also be more funding for mental health services, she said.

Adviser Tim Fairbrother said he would like to see long-term vision in the Budget, and attention paid to the healthcare sector.

“A focus on infrastructure spending in both physical facilities and IT frameworks through a one-combined DHB system, will create much needed jobs in construction and IT now, and an organised health system where each government doesn’t add continued patches too.”

Adviser Murray Weatherston said it would be important to avoid a “pre-election lolly scramble”. “The next five years’ lollies have already been given away.”

Tags: Budget Financial Advice New Zealand Katrina Shanks