The Watchdog

Keeping citizens in the loop

Will 20,000 ‘finance advisors’ have to declare if they have a personal financial ‘interest’ in any finance companies?

15 March 2011

(My comment underneath).

‘Umbrella’ cover for up to 20,000 finance advisers

The Securities Commission has started issuing the first Qualifying Financial Entities (QFEs) licences to 80 organisations ranging from small insurance brokers to major banks and insurance companies.

The move is part of the creation of a new regime to regulate financial advisers, lift their professional standards and to re-build public confidence.

All financial advisers will have to act with care, diligence and skill, be registered and belong to a dispute resolution scheme. They will have to be individually authorised by the Securities Commission to give personalised investment advice to retail clients, but some exceptions will apply.

“QFE status gives organisations an efficient way to meet their new regulatory responsibilities,” said the commission’s director of financial adviser regulation, Mel Hewitson.

“It means they will take responsibility for ensuring their advisers deliver professional adviser services to retail consumers,” she said. “In return, they don’t need to individually register each person”.

In fact, the bulk of the industry — some 20,000 employee advisers and nominated representatives — will come under the QFE umbrella.

Many will deal only with simple debt and insurance products but some QFE advisers will advise on more complex investments, such as KiwiSaver, produced by their company.

Brokers and other advisers who want to offer investments from a range of organisations have to be individually licensed by the commission before July 1, when the Financial Advisers Act comes into force fully.

Ms Hewitson said that the commission will now be working closely with licenced organisations to monitor how they are complying with their responsibilities.

Comments and questions 


Are ‘Qualifying Financial Entities (QFEs) licences’ going to require any form of publicly accessible ‘Register of Interests’ for ‘licencees’?

The purpose of such a ‘Register of Interests’ to help ensure that there are no ‘conflicts of interests’ between those ‘brokers and other advisers’ who offer investment advice, and those finance companies who would benefit from that financial investment?

How can ‘conflicts of interest’ be avoided if it is not a mandatory requirement that ‘interests’ are declared, in a publicly available ‘Register of Interests’ ?

Penny Bright
Effective Public Watchdog
Investigative Activist who asks the HARD questions?

Anonymous | Tuesday, March 15, 2011 – 12:10pm

March 14, 2011 - Posted by | Fighting corruption in NZ

1 Comment »

  1. Totally agree with you Penny. I worked as an “Independent Investment Advisor” in the gold rush eighties (until the crash) and our bosses instructed us to only recommend the savings plans and investments with the highest commissions. It was a VERY lucrative industry. Fortunately I have grown a conscience since those days.

    Comment by Paul Hickman | March 15, 2011 | Reply

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