Labour’s spokesman for Consumer Affairs, Michael Wood, said there was little chance that the Financial Services Legislation Amendment Bill would make it through Parliament before the election.

The bill replaces the Financial Advisers Act with new financial advice provisions within the Financial Markets Conduct Act.

It aims to simplify the regulation governing the sector but concerns have been raised about the designations it introduces, and its conflict of interest provisions.

But if National does not win the election, the fate of the bill may rest in Labour’s hands.

Spokesman for regulatory reform David Parker said the Financial Advisers Act in its current form had been a “cock-up” from Simon Power.

“Regulation of financial advice went right over the top.”

He pointed to the sale of state-owned power companies as an example of where it had gone wrong.

“So many broking houses were conflicted because they had a role as sub-brokers, there was nowhere someone in the street could go to get information.”

Parker said he suspected Labour would support the bill, at least until its first reading.

He was supportive of the idea of reducing unhelpful regulation on financial advice.

Meanwhile, adviser Murray Weatherston has submitted on the bill’s client-first provision.

He said the clause in the bill put into statutory form Cabinet’s decision to extend the client-first duty to all advisers and enshrine it in legislation.

The bill says advisers have a duty to put a client’s interests first.

If they know, or ought reasonably to know, there there is a conflict between the interests of the person to whom advice is being given, and their own interests, or the interests of any other person, “[the adviser] must give priority to [the client’s] interests, including by taking all reasonable steps to ensure that the [adviser’s] own interests or the interests of any other person do not materially influence the advice.”

“I applaud the fact that the duty is expressed so clearly. No-one should have difficulty in understanding the duty as expressed that way. The law is crystal clear,” Weatherston said in his submission.

“I submit that it is critically important that the statute defines what the duty means. It should not be stated as a bald principle and be left to be decided what it actually means elsewhere.

“I am not aware where the ‘client-first duty’ applies in any other statutory setting. I have not been able to discover any case law that has considered what a client-first duty means in practice. The meaning of the duty in the Code of Professional Conduct for Authorised Financial Advisers has never been tested in the Financial Advisers Disputes Committee.”

He said the idea that there should not be a conflict with “any” other person was too broad.

It was also not clear what “doing anything in relation to the giving of advice” would mean.

“I would be very concerned if the adviser in providing some service or services to a client was obliged to determine in all cases whether or not the services they were providing, whether regulated advice or not, were the appropriate services to be providing.

"That logic could be extended to a situation where an adviser declined to provide any advice – could she be second-guessed in hindsight that she should have provided advice? That would be akin to compelling an adviser to provide regulated advice. That does not seem to be right."

David Ireland, chair of the code committee, said he too would submit against the clause.

“Irrespective of your views on whether the standard should be client first or best interests of the client or some alternative formulation of that sort of concept, code standard one [placing clients' interests first] has been fundamentally altered and its application narrowed by the way it has been reflected in the draft legislation.”