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Cabinet Decisions on the Review of Financial Advisers


The term "Financial Intermediary" has been dropped in favour of the term "Financial Adviser" as this more accurately reflects the focus of regime, the function of an adviser and is a term more commonly understood and recognised.

On 19 June 2007 Cabinet made decisions on the Review of Financial Intermediaries.

Cabinet Papers detailing decisions on changes for financial advisers arising from the Review are:

  1. Reviews Of Financial Products And Providers And Financial Intermediaries - Overview Paper
  2. Review Of Financial Intermediaries: Financial Advisers – A New Regulatory Framework
  • The proposed Co-regulatory Model will place responsibility on Approved Professional Bodies (APBs) and the Securities Commission (SC) to regulate those who provide financial advice
  • Definitions of financial advisers, financial advice and financial products have all been broadened to reflect submissions
  • Minister of Commerce will approve APBs
  • APBs will approve membership of Financial Advisers
  • All Financial Advisers will be required to belong to a minimum of one Approved Professional Body (APB)
  • One category of Financial Advisers
  • Financial Advisers will have Statutory Conduct Obligations and Statutory Disclosure Obligations
  • A publicly searchable register (database) of Financial Advisers will be available through the Companies Office

Background

To improve regulation of non-bank financial institutions, financial products and financial advisers, two separate but related reviews were commenced in 2004 and 2005, being:

Both reviews share the objectives of:

  • A sound and efficient financial system;
  • Investment which encourages growth and innovation;
  • An environment which facilitates wealth accumulation; and
  • Confidence in the sector which encourages participation by consumers and market participants.

Both reviews were informed by expert advisory groups and taskforces made up of people from key industry organisations, industry participants, professional organisations and government bodies. Their input contributed to officials' identification of issues and development of proposals for consultation. Officials' proposals for consultation were noted by Cabinet prior to consultation in 2006.  Over the three month period allowed for consultation, around 140 written submissions were received on each review. The implications of these submissions for the original proposals have been considered by officials and are reflected in the Cabinet decisions.

Timeline

  • Legislation is expected to be passed in 2008
  • APBs are expected to be in place by 2010
  • The full regime is expected to be in force by 2012

Note: This timetable is linked to the Review of Financial Products & Providers (RFPP).

See also: Update on the Financial Advisers Bill

Contacts

If you would like to send us comments, receive updates or further information about consultation, please contact us at financialadvisers@med.govt.nz

Media Release

Cabinet Papers

Frequently Asked Questions

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