Financial industry urges further regulatory reform
FOR IMMEDIATE RELEASE: Tuesday 30 September 2008
Financial services industry urges: further regulatory reform should be a priority
- Industry Opinion Poll Released -
Senior finance industry representatives agree that regulatory hurdles continue to obstruct the free flow of financial services and products across the Tasman and further regulatory reform is required, according to an industry opinion poll released today by Finsia – Financial Services Institute of Australasia.
The Finsia/Roy Morgan Industry Opinion Poll of Finsia members conducted in mid September 2008, focused on the trans-tasman agenda and the recent regulatory developments within the New Zealand market.
While the poll results suggest that recent changes to the law regarding financial products and providers will be effective in ensuring the New Zealand financial sector is consistent with international best-practice and will enhance the stability and reputation of the sector overall, NZ financial services professionals largely believe that regulatory hurdles make it difficult for the sector when conducting business across the Tasman. The poll also raised concern that from the service industries detailed non-bank deposit takers, require the most urgent regulatory attention.
In terms of consumer confidence in the wake of the credit crisis, the poll reveals that 52% of respondents believe that the recent changes to the law will be effective in raising consumer confidence in the sector and increasing NZ savings overall (up 5% from 2006). However, while 86% agree that KiwiSaver is building a new culture of savings in New Zealand, just 42% believe that the recent changes to the law will be effective in protecting Kiwi wealth.
Commenting on the results, Dr Martin Fahy, Chief Executive Officer of Finsia, stated: “Finsia strongly supported the mutual recognition regime adopted by the Australian and New Zealand governments earlier this year. However, these results suggest there are still a number of regulatory issues which continue to impact the ease of conducting business across the Tasman including: difficulty in raising capital; restraints impacting the accessibility of debt finance; as well as the complexities around managing financial risk. These challenges indicate that we still have some way to go to remove barriers impacting the integration of trans-tasman activity.”
Key findings of the study include:
• Of Finsia’s New Zealand members 49% (up 5% from 2006) believe non-bank deposit takers require the most urgent regulatory attention, followed by the Financial Planning Sector (unchanged on 32%) and Funds Management (unchanged on 14%).
• Recent changes to the law regarding Financial Products and Providers will be effective in Ensuring NZ sector is consistent with international best-practice (57%). When the review was conducted in 2006, 62% (5% higher) of respondents thought that it would be effective in Ensuring NZ sector is consistent with international best-practice.
• 71% believe that the recent changes to the law will be effective in Enhancing stability and reputation of the NZ financial sector overall (up 18% from 53% in 2006)
• 51% believe that the recent changes to the law will be effective in reducing conflicting objectives and gaps in the regulatory system and inconsistencies of regulatory treatment for similar products (up 3% from 2006).
• 52% believe that the recent changes to the law will be effective in raising consumer confidence in the sector and increasing NZ savings overall (up 5% from 2006).
• Just 42% believe that the recent changes to the law will be effective in Protecting Kiwi wealth. 58% of respondents believe that the recent changes to the law will not be effective in Protecting Kiwi wealth, this is down 4% from the 62% in 2006.
• 86% agreed KiwiSaver is building a new culture of savings in New Zealand. The wealth being built through the scheme will significantly strengthen New Zealand’s economy for generations to come.
• More than 50% of respondents said they considered it difficult to conduct trans-tasman business, in particular, marketing or packaging wealth management and general insurance products and raising equity capital.
“Undoubtedly, the credit crunch has spurred a drop in consumer confidence around the world. In this current climate, it is extremely positive to hear that the New Zealand financial services industry believes that initiatives such as KiwiSaver are building a stronger and more productive economy in New Zealand and this will ultimately strengthen New Zealand’s economy for generations to come. However, the Government needs to consider and address the concerns of the finance sector by providing clear incentives to succeed in business to ensure long-term economic growth in New Zealand.” concluded Fahy.
Notes to Editors:
As the only professional association representing the entire spectrum of financial services throughout Australia and New Zealand, its reach extends to more than 20,000 professionals working across the broad categories of banking, wealth management and capital markets.
Finsia plays a vital role in protecting the industry’s strength and competitiveness in today’s evolving global marketplace through its core purpose of helping members succeed in their careers and supporting the growth and development of the financial services industry.
This is achieved through the provision of relevant and high quality professional development programs, a comprehensive suite of career support services and an extensive range of industry-leading information resources and publications. Finsia’s leadership, advocacy and policy-setting initiatives also play a critical role in promoting industry growth both regionally and around the world.
For further information about Finsia, visit: www.finsia.com
About Roy Morgan
Roy Morgan Research is the largest independent Australian research company, with offices in each state of Australia, as well as in Indonesia, New Zealand, United States and United Kingdom.
A full service research organisation specializing in omnibus and syndicated data, Roy Morgan Research has more than 60 years experience in collecting objective, independent information on consumers. In Australia, Roy Morgan Research is considered to be the authoritative source of information on readership, financial behaviour, voting intention and consumer confidence. Roy Morgan Research is a specialist in recontact customised surveys which provide invaluable and effective qualitative and quantitative information regarding customers and target markets.
 Non-bank deposit takers (friendly societies, credit unions, building societies, industrial and provident societies), Financial Planning Sector, Funds management (ie collective investment schemes) – including superannuation, platforms and portfolio management services, Banks, Corporate capital markets, Insurance sector