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Regulation

Adviser investment statement text amended

Wednesday 29th of June 2011

Commerce Minister Simon Power announced the updated regulations, which come into force this Friday, to align the regulations with the Financial Advisers Act 2008.

He said the new regulations did not require the immediate revision of investment statements already in use of those currently being prepared.

"The old requirements will continue to apply to investment statements dated earlier than August 1, 2011. Issuers can, however, choose to comply with the new requirements from July 1," he said.

The amendments include adding information at the front of the investment statement to make reference to the new financial advisers regime and the Financial Markets Authority (FMA), the inclusion of a statement making prospective investors aware names and addresses may change after the date of the investment statement and where and how to obtain up-to-date names and contact information.

They also omit the heading ‘Engaging an investment adviser' and all the subsequent text, substituting the heading with ‘The FMA regulates conduct in financial markets.'

The new text says that financial advisers can "help you make investment decisions" but includes the caveat "using a financial adviser cannot prevent you from losing money, but it should be able to help you make better investment decisions."

Changes to KiwiSaver scheme investment statements are also included in the amendments, including details of its manager, administration manager (if any), directors of the manager and trustee.

"This aligns the requirements for KiwiSaver schemes with the requirements for unit trusts rather than superannuation schemes, which reflects the structural changes to KiwiSaver schemes effected by the KiwiSaver Amendment Act 2011."

Investment statements will also now have to refer complaints to an approved disputes resolution scheme rather than an ombudsman.

Comments (2)
W K
Just wondering, with the ever tweaking of the regulation, will any advisor be ever be caught out for an offence the regulators aren't even sure if it was committed? Anyone want to bet on it that it won't happen?
0 0
13 years ago
Andy Phillipson
I agree. We only received our official disclosure document on 30 June. It seems strange that one day we can be doing everything legal and right for the client, then the next day (without changing ANYTHING) we can be breaking the law and risking a $100k fine! Even criminals wouldn't get hit that hard. (Maybe a slap on the wrist with a wet bus ticket...). Worst thing is - we still have to pay for the monitoring, registration, and every other bit of paperwork. I often wonder if the cost has really been worth it to the economy, or the profession. I am sure that most of us could have come up with a far better option, that was easier and more cost effective to monitor.
0 0
13 years ago
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