Sharon Corbett - speaking for MBIE - at the FSC conference, Navigating Regulation, highlighted the following as reasons for the new law:
Lack of personalised KiwiSaver advice
Confusion caused by different regulation for different types of advice and adviser
Need to broaden the law to manage advice provided by robots
In highlighting the form of the changes, Corbett was concerned to point out that it would not mean the end of differentiation. That licensing would deliver efficiencies, but that the single adviser business could still get a Licence.
Of course, scale has always been a factor in the advice sector. But I think it is set to rise. What our legislators and regulators cannot change is that increasing regulatory standards must necessarily increase costs, and/or, investment. The technology trends that they identify do the same provided that they work, even for advisers that choose not to adopt technology.
The timeline news is, as we expected, that the FSLAB is much more likely to be passed at the end of 2018. Corbett added that the time allowed for transitional arrangements would not be compressed.