Govt addressing concerns over financial advisers

Commerce Minister Simon Power acknowledged today that a mystery shopper exercise undertaken by Consumer NZ highlighted some serious deficiencies in the financial adviser industry.

The Consumer magazine article particularly identifies disclosure, competency, and independence as three areas of significant concern in the financial adviser industry.

"I have to say that the findings by Consumer are very much aligned to anecdotal issues that continue to be raised with me," Mr Power said.

"But I'm confident the new financial regime the Government is implementing under the Financial Advisers Act 2008 will go a considerable distance towards addressing the shortcomings in the industry.

"The new regime will improve the standard of disclosure currently made by advisers and will ensure that more meaningful information is provided to consumers.

"Those improved standards of disclosure will ensure consumers are better placed to assess the extent of their adviser's independence.

"The regime will also ensure advisers meet minimum standards of competency to ensure they are able to provide high quality advice that is suited to the needs of their consumers."

Mr Power said that though the work would have an important impact on the finance sector, any significant change must be driven by the industry.

"Without an industry that is willing to reform itself, any government intervention will only be partly effective.

"I have every confidence that the industry will play its part in supporting this reform."

The Government is currently implementing various aspects of the Financial Advisers Act 2008 with a view to having the regime fully in force by December 2010.