By rewriting the law, the Financial Markets Authority (FMA) is doing consumers a disservice says the New Zealand Bankers’ Association.
Following the release of the FMA’s guidance note on the sale and distribution of KiwiSaver, Bankers’ Association chief executive Kirk Hope expressed serious concerns.
“This is bad for consumers because it limits access to information about KiwiSaver products. By limiting who can provide information about KiwiSaver, they make it harder for consumers to make informed decisions. It could also force people to bear the cost of using specialist advisers.”
“The FMA has attempted to rewrite the legal test for what constitutes advice making it much more difficult to provide only information about KiwiSaver products. Guidance should not be used to extend the law. If the law is wrong, change the law,” said Hope.
The Financial Advisers Act 2008 regulates the provision of financial advice. Section 10(3) of the Act 2008 sets out what does not constitute “financial advice”. These exclusions include the provision of information about a product. Paragraphs 32-33 of the guidance note purport to override this, and suggest that in some circumstances providing information can be advice.
“They’ve made incorrect assumptions about the law, and Parliament’s intentions, and have ignored all submissions on this point. Their insistence that the Act includes a concept of implied advice is not correct. And they haven’t explained how they came to this view.