As of Monday 15th March 2021, all financial advisers in New Zealand will now come under the same licensing regime… but what does this mean to you?
Essentially, these changes will mean financial advisers now have to disclose any conflicts of interest, commissions they are paid and limits on the companies or products they advise on. Up until this change occurred, financial advisers had been separated into different groups which each had different legal requirements. This meant that there was only a small group of financial advisors, around 2000 across New Zealand, that had been specifically required to put the interests of their clients first.
The change in legislation around financial advice means that there are now around 22,000 financial advisers in New Zealand. These are split into about 10,000 investment advisers, mortgage and insurance brokers and then a further 12,000 advisers who work directly for the banks and insurance companies.
David Clark, minister for commerce and consumer affairs, said financial advice played an important role in helping New Zealanders achieve significant milestones in their life such as saving for a first home or planning for retirement.
"The new regime will give consumers greater confidence to seek advice that will help with their financial goals, providing them with greater trust in the quality of that advice."
The licensing and enforcement regime for financial advisors falls under the Financial Markets Authority which last year was allocated extra funding over the next three years to help it with the workload created by the new regime.
Here at NZ Compare we welcome the opportunity to raise the standards in the Financial Adviser industry in New Zealand and the changes to the legislation will help to simplify the terminology in the Financial Adviser industry making it easier for consumers to understand what they are signing and who they are working with. Very much aligned with our mission at NZ Compare to provide consumers with a fully informed choice.
In the past, NZ Compare, trading as Money Compare was a registered financial services provider for our role in providing generalised advice. As a result of the changes to the industry we will no longer be listing ourselves and positioning ourselves as a financial advisor, instead we will partner only with the very best licensed financial advice providers to ensure you can get the best financial advice on home loans, KiwiSaver, car finance and health and life insurance.
One concern is that the new financial advice regime will lead to an increase in the bar for advisers which will reduce the number, making it harder to get access to advice. That’s where sites like Money Compare will continue to help by providing general information to help you make a fully informed choice and then, if appropriate, direct you to a fully licenced advisor to receive the customised financial advice you require.
Should you need an advisor you can complete one of our short enquiry forms and we will help to find the best financial advisor in your area for you.
Click below for the type of advice you need and let us help you find the perfect match for your financial needs - for free.