Financial advisers feel the heat

Nick Stride, National Business Review, 5 March 2004

Nick Stride has reported that Australian financial planners are reeling after the big shake-up in their industry and that their New Zealand counterparts are feeling increasingly nervous about what's in store for them.

The two-year transition period for the Financial Services Reform Act of Australia ended on 11 March 2004. Now, anybody who gives financial advice to Australians must be licensed to do so.

To get a licence, advisers must be able to demonstrate appropriate skills and experience, have adequate financial resources, and put in place training and supervision systems. Satisfactory arrangements for compensation of clients' losses are also necessary.

The legislation is intended to achieve conformity in "dealings in relation to financial products" and to ensure that financial advisers' conduct meets minimum standards.

The reforms are considered to be an indication of how things could develop in New Zealand.

However, a decision on regulation in New Zealand is not expected in the near future. Lianne Dalziel had indicated that the possible licensing of financial intermediaries was on the agenda as part of a review of the Securities Act and related issues later this year. But with Ms Dalziel's departure, we will have to wait and see what's in store.

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