Interim report on Financial Advisers Bill

The Finance and Expenditure Committee has considered the Financial Advisers Bill, particularly the definition of financial adviser and the institutional arrangements for supervising them, and has released its interim report.

The Financial Advisers Bill (the Bill) seeks to establish a co-regulatory regime for financial advisers, with the Securities Commission and approved professional bodies working together to create and monitor standards for financial advisers.

Proposed change to definition of "financial adviser"

There has been some opposition to the proposed definition of "financial adviser" in the Bill, based mainly on concerns that the definition is too wide and might unintentionally catch businesses that advise infrequently, or as an ancillary service only.

In response to the opposition, the Committee has reported its intention to invite submissions on a revised definition of "financial adviser". The revised definition is intended to be narrower in scope, catching only those whose primary business is providing financial advice, and those who do so regularly in their ordinary course of business.

Proposed change to regulatory model

The Committee has also expressed its intention to invite submissions on a change to the proposed regulatory model, so that the Securities Commission undertakes the functions and powers of the new regime rather than industry-led approved professional bodies.

For a copy of the Finance and Expenditure Committee's interim report on the Financial Advisers Bill, go to www.parliament.nz

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