Commission disclosure: What's material?
The Ministry of Business, Innovation and Employment’s Sharon Corbett and Rose Wang fronted a Financial Advice NZ webinar to discuss the new disclosure regulations, which will take effect on March 15.
The regulations have three parts: The information about a financial advice provider that needs to be on its website to ensure that consumers could choose a FAP that suits their needs, more information given when the nature and scope of advice is known, and a final tranche of disclosure when the advice is given.
As part of that, advisers are required to disclose any commissions or incentives they receive that a reasonable client might think might materially influence their advice.
If the adviser was paid a salary but their FAP received commission that would need to be disclosed if a client might think it would be a factor.
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