Two major New Zealand banks are concerned that new financial adviser regulations will make it harder for wholesale customers to undertake investment in New Zealand.
The commerce select committee is meeting today to hear a marathon series of submissions on the Financial Service Providers (Pre-Implementation Adjustments) Bill, which seeks to establish a new financial adviser regime from next year.
Chair Lianne Dalziel hoped that today’s sessions would help clarify the term ‘financial advice’ and the status of generic advice such as brochures, and determine whether a single nominated financial adviser will be able to represent multiple qualifying financial entities (QFEs).
ANZ NZ and ASB Bank representatives kicked off the first hour of submissions, and were broadly welcoming to the changes announced by Commerce Minister Simon Power on Monday.
Despite the changes, ANZ commercial managing director Graham Turley said the current definition of wholesale customers meant that “far too many medium and large businesses would be unnecessarily caught” by the regime.
Current thresholds will require around 7000 corporate and commercial ANZ customers to enter the Authorised Financial Advisor regime, despite neither asking for nor relying on financial advice from the bank.
“This will limit access to investment products and inhibit basic banking services”, Mr Turley said.
He would like thresholds dropped to $1 million for gross assets and annual turnover and 10 employees, and the term ‘institutional investor’ redefined to include habitual investors such as local authorities and state-owned enterprises.
Mr Turley also called for an alignment with the Australian definition of financial advice to help reduce compliance costs and prevent “ongoing uncertainty and confusion”.
The ASB submission supported Mr Turley’s proposed threshold changes, and recommended a self-certification process for wholesale customers to ease compliance costs and give some legal protection to banks.
The select committee meeting will continue through to 9.30pm tonight.
Thu, 06 May 2010