MBIE has released a summary of the review of the Financial Advisers Act - which you can access at this link: Download Faact
The key points I like are:
- A determination that everyone that wishes to be called a financial adviser or to give financial advice must meet a client first obligation and abide by the AFA Code (albeit an updated one offering standards relevant to the area of advice being given).
- A commitment to keeping the cost of the regime low.
- Erasing some of the perceived boundaries between QFEs, RFAs, and AFAs. Instead focusing on competence to offer advice.
- A focus on disclosure to manage conflicts of interest created by different systems for remuneration for advisers.
There are other expected changes such as requiring a greater connection to New Zealand for registration as an advice business in New Zealand. All the better to head off any problematic uses of representing the FMA as your regulator when, in fact, your business is entirely based in another country and is in no meaningful way regulated by a respected New Zealand authority.
Some areas leave questions open. The licensing regime for organisations could be great or could be terrible. We can only hope that when written it is done well. A similar concern applies to other areas where details must be worked out. However, I am optimistic that they can be worked out well. Some things I just simply do not like: why choose the word 'agent' for example.