Lawyers and accountants can provide financial advice outside the scope of the FAA when it is an incidental part of another business that is not a financial service.

Concerns were raised about the fairness of the exemptions in submissions to the FAA review issues paper.

The Institute of Financial Advisers (IFA) said it could see no reason why an accountant or lawyer who went beyond “discuss and consider” situations and made specific recommendations about an investment portfolio or insurances should not be subject to AFAs' requirements.

But MBIE said in its options paper that it was not something that it was proposing to change because there was a lack of evidence of any consumer harm or consumers being at risk.

Rebecca Sellers, convener of the Law Society’s commercial and business law committee said lawyers were fully regulated under their own occupational legislation, which required them to provide an independent service, not act if there was a conflict of interest and must meet competency and qualification standards.

“For these reasons the Law Society supports the proposal to retain the existing exemptions from the Financial Advisers Act regime.  The Law Society’s view is formed on the basis that the it has no evidence that the exemptions are having a detrimental impact on consumers’ financial outcomes, or on the professionalism or consumer confidence in the financial advice industry.  Any person with evidence to the contrary should submit on the options paper and provide their evidence to MBIE,” she said.

One adviser who did not want to be named said she had concerns that some lawyers did not fully understand investment management, even around issues such as PIE tax rates.

“What’s normal course of business,” she said. “Are solicitors and accountants going outside the parameters? They are not always well educated on how modern investors make money.  There are times when that exemption causes concern.”

SiFA has asked its members for examples of situations where the exemption has been a problem.'

Submissions on the options paper close on January 29.

A spokeswoman for MBIE did not say whether engagement over the exemptions had changed its view.

“The consultation on the options paper closes on Friday, after which officials will review and analyse all the feedback and submissions. The individual submissions will go online in due course.”