The ''new regime''
Fri March 5th 2021
On March 15th 2021, a new law on how financial advice is provided to retail clients will come into effect.
Back in 2019, Government passed a new law which will change the way financial advice is provided to retail clients (that's you!) This change will come into effect on March 15th 2021.
The Financial Services Legislation Amendment Act (FSLAA) has introduced the changes to ensure those who provide financial advice are meeting conduct and client-care obligations, and that the regulation of financial markets remains fit for purpose.
The change aims to improve the access Kiwi's have to financial advice. It will change the way financial advice is regulated and delivered, along with a new code of conduct for financial advice providers. In simple terms, this means that financial advisers need to be transparent, work in their clients best interest, and be skilled and qualified to carry out their role. They will also have to be able to demonstrate that they meet their obligations if the regulators come knocking! They will have to provide you with documentation, at various stages of the advice process, which outline things such as, but not limited to:
- what areas of advice the adviser is able to give
- what the cost for their advice is and how they get paid by suppliers
- their obligations to you
- how they use your data
- what you should do if you wish to make a complaint.
A good adviser would have already been doing this, so you may not notice any, or very little, change to the way information is provided to you. Providing compliance documents is much more than just ''ticking a box'' - your adviser should take the time to go through the information they present to you and make sure you understand what it means and why it has been given - you should feel comfortable enough to ask questions if you do not understand. You should also expect to hear from your adviser more often - they are obligated under the new regime to make contact with you at least once a year. Again, a good adviser should have already been doing this.
Overall, the changes can only be a positive thing for you as a client as you can be certain your adviser is working in your best interests.
If you would like to know more about what the changes mean for you, feel free to reach out and we will be happy to go through things in more detail.
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