Protect us against bad 'advisers'

A survey by the Sunday Star-Times of the submissions to the Taskforce on Intermediary Regulation found the biggest names in New Zealand money management and financial planning want drastic change.

The taskforce, organised by the Ministry of Economic Development, received more than 75 submissions to its "issues paper". The paper asked what was needed to provide a reasonable level of protection to Kiwis and their life savings, and raise standards among loosely regulated financial intermediaries such as financial planners and advisers.

There was strong input on four points:

* That all financial intermediaries should be covered by a compulsory ombudsman-type scheme which could investigate consumer complaints, award compensation and stop bad advisers from practising. Only bank advisers are covered by such a scheme at present.

* That financial intermediaries should be able to practise only if they have a licence, linked to competency. Now, anyone can set up as a financial adviser.

* That financial intermediaries should have to attain minimum qualifications before they are allowed to advise on people's life savings.

* That real estate agents should be regulated as financial intermediaries if they give advice on investing in property. Now, real estate agents advertise and promote properties on their investment potential.

The results, being collated by the taskforce, will put pressure on the government for change

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