NZ urged to change adviser laws

THE SECURITIES Commission has recommended that the New Zealand government should make significant changes to laws governing investment advisers.

“We believe our recommendations, if adopted by Government, will strengthen the integrity of the investment process in New Zealand and improve public confidence in the investment advisory industry,” Securities Commission chairman Jane Diplock says.

She says the changes, which were presented to commerce minister Paul Swain, were made after the commission circulated a discussion document amongst the industry that attracted 40 submissions.

Diplock says that in general there was strong support for the reform proposals in the paper. The most important of these related to:

disclosure of important information that may indicate conflicts of interest (such as remuneration and commissions), and the qualifications and experience of advisers;

making the recommendation of illegal offers of securities an offence; and

strengthening the enforcement of investment adviser laws.

The commission’s recommendations have been welcomed by the Investment Savings and Insurance Association (ISI).

“We are supportive of moves by the commission to improve public confidence in the investment advisory industry,” ISI chief executive Vance Arkinstall says.

“New Zealand is fortunate in the quality and expertise of its investment advisers. Nonetheless the industry constantly seeks improvements that strengthen the integrity of the investment advisory process and increases investor confidence,” he says.