The ways in which financial advisers connect with prospective clients is about to change. New advertising guidance being put in place by the regulator are due in the coming weeks.

Financial Advice New Zealand, in their proposal to the FMA, have revealed several key areas that they believe could impact the livelihood of advisers if the regulator gets it wrong.

CEO of Financial Advice NZ, Katrina Shanks, told Good Returns that a key focus for the regulator needs to exclude “statements of advice” from being bound by laws relating to advertising.

“There is concern that the wording in the guidelines is too broad and it picks up statements of advice. We want to make sure that statements of advice are explicitly removed from the advertising laws, because if they were not it would be disastrous for the advice sector.”

Another point Shanks raised is that “short-form advertising”, the snippets of information that people most often encounter online, is central to the way advisers interact with prospective clients.

“We agree that ads shouldn’t be misleading in any way, shape or form. But we also believe that the requirement around advertising for financial services is very explicit about what you can and can’t do, and what you need to disclose when you communicate.

“The way that many people engage is through short-form advertising, where you have an image that captures people's attention and from there they click onto further information.

“These short-form ads are really just a pathway to engage with consumers. If we want consumers to seek more advice, if we want New Zealanders to increase their financial health, wealth and wellbeing, they need to be able to access more information.

“And if the way they access more information is by advertising on Google, Facebook or LinkedIn where you are limited to the numbers of words you can use on an image, then we don’t want these guidelines to prevent New Zealanders from accessing information.”

But Shanks is hopeful that the FMA will take these issues on board and create a series of guidelines that benefit both New Zealanders and the advisers trying to reach them.

“What we want is relevant, engaging, modern communication which attracts New Zealanders to learn more about their financial health. To do that we need to be able to communicate in a modern manner, and part of that is short-form advertising.

“To be excluded from that will only exacerbate the underinsurance and low take up of financial advice in New Zealand.

“But at the same time it has to be balanced with not being misleading. We believe that we can get that balance.”

The RFP for the FMA guidelines on advertising closed on the February 18. The regulator will be releasing their final guidelines in the coming weeks.