Speaking at yesterday's Tower quarterly briefing, Stubbs said "when you change an industry so dramatically as you do when you bring in those sorts of regulations, you're always going to get a relatively high attrition rate, and that's what's happened, so arguably there's a shortfall in quality financial advice right now."

Stubbs said that the increased costs of a professional service would also hit the smaller investor harder.

"Now it's much more like a profession so people will price their time like a profession, and that means if you're a smaller investor it'll be more difficult to get the advice you may have got in the past when there were more advisers out there."

Stubbs did say however, that the regulations would result in advice of a "uniformly higher standard."

On the subject of KiwiSaver Stubbs said that despite falling membership trends, for which he cited the recent Budget changes and the possibility of compulsion, the scheme remained a resounding success.

He said that taking away bank deposits, nine out of every 10 dollars saved now goes into KiwiSaver.

"It is by far the default product for saving in New Zealand, and we think as that becomes commonplace, a byline for savings, that Governments will slowly but surely feel as if compulsion is more and more attractive."

He also stressed the role the Financial Markets Authority (FMA) has in maintaining the integrity of the KiwiSaver system, noting that many people incorrectly believe KiwiSaver is Government guaranteed.

"There are better and worse run KiwiSaver schemes, and so the FMA has an interesting job in the future to make sure that we don't have a high profile blow up of a KiwiSaver scheme, because it won't just affect the members of that scheme, it will I think affect the brand of KiwiSaver, which has been so positive for Kiwis to date."

He said the value of KiwiSaver has been demonstrated through its success during the global financial crisis (GFC).

"We've had the second biggest wealth destroying event in this century happen in the last three years. KiwiSaver has basically trucked right through that and most people have got positive returns and done extremely well, so there's a very positive brand equity associated with KiwiSaver," he said.

"It would be a shame if a blow up of a high profile scheme damaged that. The FMA's got a big role to play in that.

"There is now $9 billion worth of Kiwi's money in KiwiSaver schemes that need to be protected, and that nine could turn into - if we follow the Australians - $250 billion in 20 years time. That needs a serious regulator."