Financial Advisers Bill gathers pace

Measures to improve the quality of service rendered by financial advisers and make them more accountable and transparent are among the highlights of a new Bill that is now with the Commerce Select Committee of Parliament.

The Cabinet last week approved the Financial Service Providers (Pre-Implementation Adjustments) Bill, which sought to amend the Financial Advisers Act 2008.

The proposed changes will affect the obligations of advisers to institutional investors, large companies and highly sophisticated individuals.

It would allow institutions that operate as groups of related companies to use the ‘qualifying financial entity’ model efficiently and issue generic advice such as brochures in their own name.

Commerce Minister Simon Power said the proposed Bill would increase the powers of the Security Commission to grant limited exemptions from the regime.

“It would also increase the Government’s ability to give total exemptions from the regime through regulations.

“These proposed changes will make a major difference for industry members working to comply with the new financial adviser regime, while maintaining high standards for investors,” he said.

Mr Power said the amendments would target financial advisers.

“This is an area that needs monitoring,” he said.

“We must ensure that those not in need of comprehensive protection of the regime are not unduly burdened. But it is important to prevent unscrupulous advisers taking advantage of any loopholes in the system,” he said.