SiFA has been having meetings with MBIE as it moves through its process of consultation with financial advice industry stakeholders.

The Ministry has received submissions on the FAA review issues paper and is preparing an options paper for release in November.

SiFA spokesman Robert Oddy said his group was asked what would be useful in terms of the review. “Our suggested was they should destroy the Financial Advisers Act completely and start afresh.”

He said regulation was adding about $100 million in costs for the clients of financial advisers every year, when the cost of running an AFA business, including authorisation and other regulations such as AML, were considered.

“Clients are having to pay that because no one else is going to sit back and pay it.”

He said there was little advantage for consumers when there were such large costs involved.

Oddy suggested that could be part of the reason that many investors decided it was easier to buy property instead. "Notwithstanding that they do not understand the risks."

He said his group had asked MBIE what the reason for regulation was, what problem it was trying to solve, and had not been able to receive a satisfactory answer.

But he said that if the burden of meeting regulatory requirements could not be eased in some way, or if the expectations on advisers increased, a significant number would likely decide to leave the industry. “There’s a certain point you reach where enough is enough,” he said. “If it’s not viable, why should you do it?”