FMA to consult on KiwiSaver sales and distribution

Monday 25th June 2012

The Financial Markets Authority will consult on the draft guidance for the sale and distribution of KiwiSaver products.

The guidance is designed to help distinguish between information given to investors and investment advice. It sets out who can offer services and what customers believe they are being offered. When opinion or advice has been given the FMA will distinguish between class advice and personalised advice.

“We recognise that an important objective of KiwiSaver is to make it easy for New Zealanders to save for their future,” Sue Brown, head of primary regulatory obligations said in a statement. “In developing our guidance, we have considered the need for potential investors to have access to information about KiwiSaver schemes, and to advice which is provided with skill, care and diligence.”

Currently a person giving KiwiSaver information doesn’t have to be registered as a financial adviser. That means they can't be held accountable for information provided.

Meanwhile, the Institute of Financial Advisers complained today that the Financial Markets Conduct Bill, currently before Parliament's commerce select committee, was drafted in such a way that if a registered adviser made unsolicited contact with a prospective client, they would be unable to sell them any financial services.

The IFA wants the clause removed from the bill, saying such strictures would stifle marketing efforts and is unnecessary because oversight for financial advisers exists in the newly passed Financial Advisers Act.

Submissions close on July 16.

BusinessDesk.co.nz

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