NZ to track Australia on commissions
New Zealand's regulations on adviser commissions are unlikely to differ greatly from Australia's, according to Angus Dale-Jones, Securities Commission head of supervision.
Wednesday, November 25th 2009, 7:53AM
Dale-Jones says that any regulation around adviser commissions must be framed around a "trans-Tasman context".
"We wouldn't want there to be hugely different [commission rules] than in Australia... We may not end up precisely like Australia but I'd be surprised if there were not parallels," he said. "However, there needs to be a discussion around that."
Yesterday, the Australian Ripoll parliamentary inquiry recommended industry and government consult on the best way to "cease payments from product manufacturers to financial advisers".
Ripoll told Australian press after the report was tabled that it was "a big, big change that we have recommended" with obvious ramifications for commission payments.
"The word 'cease' means 'stop'. To me it is pretty clear what the word 'cease' means," Ripoll said.
Dale-Jones said both the Code Committee and the Securities Commission would contribute to how regulations addressed the question of commissions.
He said the Code Committee would begin talks shortly with interested parties after receiving feedback on its two published consultation documents.
"There's likely to be lengthy discussions on commissions," Dale-Jones said.
He said the Commission and the Code Committee will be looking broadly at the "objectivity of advice", including conflicts of interest within the industry.
"It's a complex area and there are no easy answers on commissions," Dale-Jones said. "But if you're looking at conflicts of interest, commissions are right at the top of that list."
He said the Commission also remained "open" to discussing other ideas thrown up by the Ripoll inquiry, such as the creation of a ‘fidelity fund' to compensate investors.
"PI [professional indemnity] insurance covers investors in some cases but not in others... we'd have to look at [compensation arrangements] in detail," Dale-Jones said.
| « Commission ban deferred but Ripoll effect to hit NZ | Sovereign takes regulation bull by the horns » |
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