Last night, commerce and consumer Minister Kris Faafoi formally began the third phase of the bill’s journey into New Zealand law, a final step before it receives Royal Assent.
Faafoi thanked the financial services sector for working with MBIE on the Bill so far. He said the government would continue to work “in a consultative way” with the financial services industry, “to ensure we land on a code of conduct for the sector works for the sector and in the best interests of consumers”. He promised an “even” outcome for small and large advisers.
The Minister said he was keen to “get the final balance” of the new Code of Conduct right, and said parliament would seek feedback from the FMA before it finalises the new Code. “I want to make sure that process is done quickly so in order to give sector time it need to transition,” he added.
The Minister pointed to a lack of “trust between consumers and the financial services sector. He said the new Code of Conduct is designed to ensure New Zealanders get appropriate advice for their insurance, mortgages, pensions, and investment products. He said information and advice on financial products “isn’t as necessarily as well informed as it could be”, currently.
Faafoi added: “We want to make sure advice is of a higher standard and that consumers feel they can trust advice given by the financial advice sector.” He said consumer trust was particularly important in light of the Royal Commission, and recent conduct investigations by New Zealand regulators into bank, insurer and adviser conduct.
“The two reviews [into financial services] by the FMA and Reserve Bank show works needs to be done. This legislation will go part of the way, and the consultation off back the reviews will go some way to address trust issues consumers have. The [financial services] sector knows that if it is to flourish, consumer trust is a big issue they need to address.”