Budget 2009: Almost $12 million extra for financial adviser watchdog

Commerce Minister Simon Power said the government will pump an additional $2 million this year as it seeks to "restore confidence in the financial markets by introducing a minimum standard of competence for financial advisers" and institute the Securities Commission as the central regulatory body for the sector. The government will continue to review its funding requirements, but expects the regime to be fully-funded from 2011/12, Power said in a statement.

"It would be consistent with the way financial services around the world are regulated to expect industry, which is benefiting from regulation, to cope" with funding the regime in four years time, said Angus Dale-Jones, director of supervision at the Securities Commission.

The two largest bodies representing financial advisers, the Institute of Financial Advisers and Professional Advisers Association, are happy to see the government injection, but want to see more detail. Lyn McMorran, president of the IFA, said the expectation for the regime to become self-funding could be a concern, as any fees would have to be passed on to consumers.

The extra money "is good news in the short-term," but we need to see how it's going to be spent, McMorran said. "I'm unsure whether it will be enough."