Better disclosure needed - but how?
The Ministry of Business, Innovation and Employment has released the submissions it received in response to the options paper for the review of the Financial Advisers Act.
In it, MBIE said it knew there were concerns AFAs having to meet strict disclosure requirements, while RFAs did not, could be misleading for consumers, and that what was being disclosed was not meaningful.
It proposed a number of options, including that all advisers could be required to disclose the same information in the same format, the disclosure requirements could be reviewed to make them more meaningful, or consumers could be referred to the Financial Service Providers Register or another website for more information about their advisers.
The submitters were supportive of changes to the disclosure rules. Many said longer disclosure documents were not being read and were irritating for clients who did not understand the need for them.
But they disagreed on what should replace them.
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