[Weekly wrap] Diminishing prospects

The biggest story on Good Returns this week involved a law that could make prospecting for new clients much more difficult for advisers.

Section 71 of the Financial Markets Conduct Bill, which deals with "unsolicited offers" has been highlighted by Chapman Tripp's Tim Williams as potentially problematic for financial advisers and product providers.

The section would prevent AFAs and QFE advisers from "approaching" anyone other than existing or former clients with product offers, while non-QFE RFAs would have to sit around praying for people to walk in the door saying "I've had an epiphany about the need to be adequately insured and I decided to talk to you about it."

It's hard to know what politicians were thinking when they came up with this particular gem (if they were thinking at all) but it is clear it needs to be re-written because leaving it up to the Financial Markets Authority to sort out the mess later through its own regulatory powers would be an unsatisfactory approach.  Bad law shouldn't be written in the first place.