Philip Holland Financial Independence financialindependence

Regulation of the Financial Services Industry is here.

Come the end of June, anyone giving financial advice needs to be part of the new regulation. This includes people giving advice on investments, Kiwi Saver, insurance and mortgages.

What does this mean?

Advisers need to be registered with the new Financial Markets Authority (FMA) and belong to a disputes resolution scheme. This is great news for consumers as you will now be able to check online if an adviser is registered to give you advice and you will also have a dispute resolution service available to you should you wish to make a complaint. The fines and fees for disputes and non compliance are quite substantial.

Where to check

To check if your adviser is registered visit: www.fspr.govt.nz

Please note that some advisers are part of QFE's (Qualifying Financial Entities) and will not be registered. These advisers tend to be via banks or 'tied” to a financial institution and fall ‘under their wings'. Generally a QFE adviser will be limited in what ‘products' they are able to advise clients to use. For example, many bank tellers will be QFE advisers as they only sell customers their banks term deposits. If in any doubt, ask your adviser for their disclosure statement. If they do not have one it is buyers beware and maybe it's time to seek a professional adviser.

Road to regulation

Although the road to introducing the regulation has been full of potholes and more twists than a packet of twisties, it is a good outcome for consumers. It gives better transparency with increased disclosure, better ability to find out if your adviser is registered or not and most importantly it gives consumers an avenue to complain if they feel they have been let down without subjecting themselves to Fair Go.

With fines for non-compliance, ranging into the hundreds of thousands, advisers now have a ‘big stick' to encourage ethical, moral advice at all times and for those advisers like Financial Independence it will be business as usual.

Philip Holland is the managing director for the
Financial Independence group, Tauranga's leading specialist insurance and mortgage advisers. For further information please contact an adviser at Financial
Independence phone 07 578 4414 or email info@yourbroker.co.nz. A Disclosure Statement is available free of charge on request. The opinions stated in this article are those of the writer and should not be taken as specific advice.