Disclosure Requirements And Commencement Date Bring Certainty For Financial Advisers
Financial Advice New Zealand welcomes the announcement of the start of the new financial advice regime and the long-awaited disclosure requirements, released by MBIE today.
Chief Executive Katrina Shanks says the announcement of 15th March 2021 as the start of the new regime brings certainty to financial advisers who over the last 24 months have faced a myriad of change and uncertainty.
“Financial Advice NZ provided a comprehensive submission on the draft regulations late last year, and at first look many of these points have been picked up in the final disclosure requirements,” she said.
“The focus of the sector during this process was to ensure the right balance between good consumer outcomes and a financial advice sector which isn’t encumbered by unreasonable red tape and adverse outcomes.
“We support regulations around disclosure made to clients – including on conflicts of interest, commissions and other incentives and disciplinary issues.
“However, we are pleased to see a change from the draft disclosure requirements that now only requires disclosure of these matters when they would likely materially influence a client’s decision. This is something we strongly recommended in our submission to ensure disclosures were meaningful and not overwhelming for consumers.
“We were concerned the draft regulations required disclosure of product fees charged by unrelated third parties (e.g. insurance premiums) so the removal of the requirement to disclose fees for ‘acting on the advice’ was a sensible move.
“We know that between now and March 15, there is a lot to work through, to understand and to implement. We note there are no transitional provisions given there will now be more than 8 months until new regime commences.
Financial Advice will work hard to support financial advisers’ understanding of these requirements which will begin with a webinar next Friday 3 July at 11am and Masterclasses during its conference 21 September – 24 September to provide tools to attendees to implement these new disclosure requirements in their advice businesses.