Thursday 4th August 2005
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The changes include restrictions on who can call themselves a “personal financial adviser”, standards, and a disciplinary regime for all intermediaries.
And, in an apparent dig at the timetable released last week by the Ministry of Economic Development, which suggested implementation would not take place until 2008, Task Force chairman Michael Webb urges speed.
“If our recommendations are accepted by the Government, we believe it important that they be advanced and implemented expeditiously so as to build on the support and momentum for reform”.
Intermediaries deemed to be acting in a “personal financial adviser” role will have to meet higher standards than those marketing a product.
Aimed at dealing with criticisms that too many advisers are simply “commission salesmen”, advisers who do not meet the required standard will not be able to call themselves a personal financial adviser and will be required to issue a ‘health warning’ to the consumer as to the limits of the role that they undertake, the report says.
“Effectively, this will require a substantial number of existing intermediaries who purport to, or do, provide advice tailored to the need of the individual consumer, to make a choice, namely, whether they wish to continue providing personalised financial advice with the corresponding duties (in some cases, this may require upskilling) with the corresponding benefits or whether, going forward, they confine their role to product marketing and disclose that role and its limitations to the consumer.
Commerce Minister Pete Hodgson described the report as “excellent” and “comprehensive”.
“It is anticipated that some policy options will be ready later this year, detailed work on the regulatory framework completed by the middle of 2006, with the normal legislative process to follow.”
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