'Umbrella' cover for up to 20,000 finance advisers
The Securities Commission has started issuing the first Qualifying Financial Entities (QFEs) licences to 80 organisations ranging from small insurance brokers to major banks and insurance companies.
NZPA and NBR staff
Tue, 15 Mar 2011
The Securities Commission has started issuing the first Qualifying Financial Entities (QFEs) licences to 80 organisations ranging from small insurance brokers to major banks and insurance companies.
The move is part of the creation of a new regime to regulate financial advisers, lift their professional standards and to re-build public confidence.
All financial advisers will have to act with care, diligence and skill, be registered and belong to a dispute resolution scheme. They will have to be individually authorised by the Securities Commission to give personalised investment advice to retail clients, but some exceptions will apply.
"QFE status gives organisations an efficient way to meet their new regulatory responsibilities," said the commission's director of financial adviser regulation, Mel Hewitson.
"It means they will take responsibility for ensuring their advisers deliver professional adviser services to retail consumers," she said. "In return, they don't need to individually register each person".
In fact, the bulk of the industry -- some 20,000 employee advisers and nominated representatives -- will come under the QFE umbrella.
Many will deal only with simple debt and insurance products but some QFE advisers will advise on more complex investments, such as KiwiSaver, produced by their company.
Brokers and other advisers who want to offer investments from a range of organisations have to be individually licensed by the commission before July 1, when the Financial Advisers Act comes into force fully.
Ms Hewitson said that the commission will now be working closely with licenced organisations to monitor how they are complying with their responsibilities.
NZPA and NBR staff
Tue, 15 Mar 2011
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