Financial Services Legislation Amendment Bill- First Reading – Video 8
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Financial Services Legislation Amendment Bill- First Reading – Video 8


Thank You mr. speaker I call Willow Jean Prime okay sure ah mr. speaker I’m really pleased to take a stand on the first reading of the financial services legislation amendment bill and I wanted to start on a lighter note but then get into a more serious conversation about it and I wanted to start by acknowledging my first financial advisor that being my mother and she’s just left the house with the baby so I’m hoping that she is listening on parliamentary TV next door in the far no room but yes ma’am was my first financial provider advisor and when I look at this legislation that we are introducing to the house here I don’t think she would meet a lot of their criteria but I do want to acknowledge her and I also want to acknowledge that as the Labor Party we understand that financial decisions can have a huge effect on people’s lives and the wise use of money can dramatically improve people’s quality of life and their ability to support their family and in fact we believe that financial literacy and budgeting is so important that we will create a school leavers toolkit to equip school leavers with vital life skills including having financial literacy and budgeting skills and where they can learn about things like KiwiSaver which we have talked about in the house tenancy agreements and credit cards etc but we need to take that a step further in addition to that we need to improve access to and improve the quality of financial advice for New Zealanders we need to make it easier for people to access financial advice to make more confident and informed financial decisions and in particular people with simple needs or low levels to invest need to be able to access the financial advice that they need and so it is worth that that I come to this bill and those are some of the proposed benefits of this bill the overall objective of this bill is to promote the confident and informed participation of consumers and vistas and businesses and financial markets I want to thank the Ministry of business innovation and employment for the review of the financial advisors Act 2008 and the financial service providers registration and dispute resolution Act 2008 in 2008 when these acts were passed bringing into effect the current regime and regulating financial advisors for the first time in New Zealand the regime lifted professional standards by requiring financial advisors to be accountable for their advice and to meet minimum conduct obligations it has improved redress by requiring those who provide advice to retail consumers to belong to a dispute resolution scheme MB were required by the statute to review these acts within five years of their commencement and I want to thank MB and the many many submitters there were over 400 submissions 800-831-6273 there some types of the financial advice aren’t being provided and we heard that earlier particularly around KiwiSaver that was highlighted an additional report the current regulatory provisions are limiting the types of advice provided and advice gaps are appearing in areas where it is expected more New Zealanders may want advice and it was most starkly highlighted by the lack of personalized advice on KiwiSaver and the member who spoke earlier Michael would highlighted those domestics the review found there different levels of regulation they currently apply in the different situations has created a real disincentive for financial advisors to give personalized advice but there were other issues including the quality of financial advice which may be sub optimal and compliance costs are unbalanced and there are inefficiencies and unnecessary complexity is preventing adequate consumer and understanding due to terminology and definitions which are confusing in disclosure statements which are unwieldy and do not contain information that people need to make informed decisions it was said that the regime is overly complex the various tiers of the advice and advisers are not helpful for consumers and frustrating for advisors for example the term registered and the term authorized being used those two terms are confusing and perhaps indicate that there may be some form of hierarchy which that is not the case so disclosures ensures that consumers have sufficient information about the person providing them with financial advice before actually engaging these services however current disclosures are documents they’re too long they’re too complex in their jargon field and so often end up not even being read and even if the statement is read by consumers it’s far too complex for most and does not contain the information consumers need to make informed decisions so what does the bill do to actually solve these problems well in particular to address the unnecessary complexity that is preventing adequate consumer protection and understanding the overall the regime will be simplified as the bill removes many of the different categories and boundaries that existed and the financial advisors act as all financial advice will be held to the same standard consumers will be able to get advice and confident in the knowledge that it is held to good standards the bill also requires everyone who gives financial advice to ensure that the client understands what the advisor can actually do for them including what limitations there might be on the advice that they can give in so carrying on the theme of modernizing our legislation and making it easy to understand I spoke earlier this week about the trust bill on this similar issue this bill will introduce more meaningful more plain English diffuser disclosure statements having a bit of problem deal with my pronunciation disclosure statements which are prescribed in regulations which will ensure that consumers can make better informed decisions and carrying on with the theme of modernizing our legislation to accommodate technological advances that we have heard in the house this week this bill is technology neutral and as a result it has believed that it will be it will better enable innovation for example the bill enables rabo advice and it is believed that Robo advice could significantly improve the availability of advice for those consumers who are not currently hitting any financial advice at all and I’m interested in the submissions on this through the Select Committee process in particular this section is being amended to remove natural persons which will allow flexibility for the use of technology in for future innovation in in conclusion I just want to conclude by highlighting that this is all about improving access to and improving the quality of financial advice for New Zealanders making it easier for people to access financial advice and to make more confident and informed financial decisions in particular people with simple needs and low levels to invest being able to access the financial advice that they need and it is with this that I am happy to commend the bill to the house and its referral to the Select Committee this is mr. speaker this is a split call five minutes dr. Deborah Russell Thank You mr. speaker I’m

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