FAA review begins
It signals the start of an 18-month review process.
The terms of reference say the objective of the review is to analyse the role of financial advice and financial service provider registration and dispute resolution in improving financial outcomes for New Zealanders and to assess and update the objectives of, and rationale for, regulatory intervention.
It says regulation was put in place with the intention of promoting sound and efficient delivery of financial adviser services and to encourage public confidence in the professionalism and integrity of advisers.
MBIE said: "An effective and well-functioning system of regulation for financial advice is important because a healthy financial advice sector requires a level of public trust. This trust was undermined by real and perceived issues with financial advice prior to the implementation of the FA Act. Clients expect a level of care, skill and diligence from financial advisers. Where advisers do not meet these expectations, or where they do not act in the client’s best interests, this can lead to significant financial detriment to those clients. The costs imposed by regulation can make advice more costly and less attractive to consumers, reducing the number of people receiving advice about financial matters."
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