Task Force recommends changes
4 August 2005
Task Force recommends changes for financial advisers and marketers
The Financial Intermediaries Task Force today released its final report with recommendations to the government for a package of measures designed to increase confidence for consumers in dealing with financial advisers and marketers. The Task Force has been focussing on those who provide financial advice, or who market and promote financial services to the public. Michael Webb, Chair, said the Task Force did not see the industry as being in crisis but that there definitely is a case for change.
¡§The issues we have identified do undermine the market¡¦s ability to function effectively, and the confidence of consumers in that market. Properly addressed they would, in our view, significantly contribute to a better functioning industry and better opportunities for consumers and intermediaries.¡¨
¡§The Task Force is confident we have recommended a balanced set of reforms, taking into account the need to have a regime where consumers can be confident in the advisers they deal with. This in turn can assist consumers in making quality and informed decisions, and encourage greater use of financial intermediaries where it is appropriate to do so.¡¨
In formulating its recommendations the Task Force has also been concerned that any reforms should be workable, proportionate and cost effective, and that the regime should be one best suited to New Zealand, having regard to both domestic and international considerations.
Key changes recommended in the report include:
-ƒneasy access to straightforward and
effective dispute resolution and enforcement facilities;
-ƒnwhere an intermediary breaches obligations, a disciplinary process with effective sanctions including, where appropriate, removing the intermediary from practice;
-ƒnclear and concise disclosure of intermediary functions, obligations, and remuneration;
-ƒnrequirements for intermediaries to comply with appropriate standards relative to their functions;