The bill has passed its first reading. Select committee submissions close later this month.

The bill introduces new conduct requirements for banks, insurers and non-bank deposit takers. It requires that they have programmes in place to ensure that everyone dealing with their products, including intermediaries, adhere to their conduct rules, and puts pressure on product providers to avoid incentives that could create poor customer outcomes.

Financial Advice NZ chief executive Katrina Shanks said more needed to be done to make clear what was expected in relation to financial advisers in the bill. While there is a carveout for financial advice providers, there is not one for financial advisers at this stage. The definition of intermediary was also not clear, she said.

She said without an explicit carveout for financial advisers, it could mean they had every product provider’s conduct programmes applied to them at every stage of their work.

At the moment, an adviser helping a client through a claims process could still be captured by the insurers’ conduct programme at the exact point when the adviser should be most independent from the provider, she said. “We’ve got to be really careful that if someone is working on behalf of a client in a claim they aren’t influenced by the provider in any way, shape or form.

“I have concerns because there was no exposure draft consultation period.”

She said Government officials had been under so much pressure to produce a bill quickly and that was the environment that would create drafting errors and unintended consequences.

“This bill is far reaching.”

It would need input in the select committee process, she said, and that should be done in an unhurried way.

Shanks said she supported the intention of the bill but it needed to be more clearly drafted. She urged other parts of the industry to make a submission.