The new Financial Services Legislation Amendment Bill is intended to improve both New Zealanders’ access to advice, and the quality of the service provided.

Financial law expert David Ireland, of Kensington Swan, said there could be seen to be a conflict between those two aims. 

A challenge for the working group would be to ensure they improved both with the new code, he said. “And a drive to increase quality doesn’t cut off availability.”

Institute of Financial Advisers chief executive Fred Dodds said some of the “accessibility” question would be answered with information-only services from bigger providers, or roboadvice solutions. “That’s seemingly being seen as the answer to everyone’s worries.”

But there could be quality concerns with those, he said.

“We know that information-only has a quality issue, they can only go so far – when does sales become advice? That’s a quality issue. Roboadvice hasn’t been tested for quality – where is the competence testing for the algorithms?”

He said independent advisers’ numbers were limited, which would necessarily limit the amount of advice they could give.

The quality of advisers’ advice would need to be increased.  “Over time we need to continue to raise the bar until we get to the stage where we are seen as a recognised profession.”

Lawyer Sue Brown said it should be possible to achieve both aims.

"The fundamental keys to quality advice are ensuring investors can access ‘right-sized’ advice that meets their needs, that they understand the service they’re receiving, and that their adviser, whoever or whatever they are – financial adviser, nominated representative, financial service provider through robo, is competent to provide it. These factors are also key to making sure there are enough advice providers to meet that need.  I see those two sets of factors as consistent, not contradictory."

The Ministry for Business, Innovation and Employment was not concerned.

“We consider it is possible to ensure both that financial advice can be accessed and that it is of a good quality,” a spokesperson said.

“The Financial Services Legislation Amendment Bill seeks to regulate financial advice with a view to ensuring the availability and quality of advice for those seeking it. The Bill removes regulatory boundaries, making it easier for those giving advice to respond to their clients’ needs, and introduces universal duties of conduct, competence and client care to improve the quality of advice.