New Zealand hopes for COFI changes

Financial Advice New Zealand hopes to open up at least some of the bureaucratic clutter that could cut a large part of the financial advisory industry.

Thursday, May 12, 2022, 7:23 AM

and Eric Frykberg

He also spoke with senior officials to stop the Government from enacting laws that are struggling with problems addressed by a law three years ago.

Financial Advice NZ chief executive Katrina Shanks said the talks had gone well.

The new bill in question is the Financial Markets (Conduct of Institutions) Amendment Bill, or COFI.

Shanks said the bill was a good one, because it introduced a code of conduct for businesses such as banks, insurers or non -bankers. .

But in the middle of parliament, the bill was changed to take the visitor to the financial advisory section.

However, that area is governed by the Financial Services Legislation Amendment Act of 2019 (FSLA).

The FSLA regulates government financial counseling, or FAP, which counselors work hard to implement with a lot of time and money. The process began last March and will be completed next March.

But having the second set of rules thrown at counselors in the form of enforcing the first set of rules was a far cry for Shanks.

“You immediately have both legal and cultural requirements,” he said.

“You’ve got the Financial Market Opportunity (FMA) to look at a lot of attention.

“Then you have to have product suppliers that meet the requirements and cultural rights, but differently, because with different laws there are other requirements.”

In the wake of these concerns, the Government has decided to repeal the COFI bill as part of a parliamentary process, pending the submission of a Memorandum of Understanding (SOP) outlining the issues. done.

That SOP is being prepared by the Ministry of Business, Innovation and Employment (MBIE) and the FMA. Shanks met with staff there to express his concern and enjoy the progress of the talks.

“I think they went well, we raised legitimate concerns about the law and the unintended consequences of that law on financial advice.

“Financial counseling is not intended to have two major pieces of legislation for employment and culture. FSLA was originally intended to guide the practice and culture for financial counseling.

The final results of the SOP are awaited.

A problem with the COFI bill is that it is primarily intended to train, direct or manage financial institutions as suppliers of their products.

This has led to complaints about the extent to which responsibility cannot be met, and counselors have been able to reduce the number of jobs they work with to avoid having to implement multiple projects. .

This can reduce competition and select customers, reducing the likelihood of the law.

Shanks noted that FSLA requires skills, knowledge and expertise among coaches, so training will be increased by organizations.

In a cabinet letter released in March, the Government withdrew the idea of ​​training and facilitating negotiators but they still wanted to be covered by the COFI law.

Further changes in this regard relate to the final version of the SOP.

It is not clear when it will be released, although the government has said it wants the law to be repealed by the middle of the year.

Words: CoFI

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New Zealand hopes for COFI changes

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