AWA PRESS NEWSFLASH FOR FRIDAY 29 FEBRUARY
Financial adviser applauds tough new regulations
Liz Koh, a financial adviser in Wellington and Kapiti Coast, says that tough new rules governing the practice of
financial advisers in New Zealand will lead to an exodus from the industry.
Changes to the Securities Markets Act 1988 that come into effect this Friday (29 February) mean that advisers will now
need to disclose comprehensive information about themselves before they give advice, with the prospect of heavy
penalties if they do not comply.
Recent collapses of finance companies have shown up the poor advice offered by some advisers in the past – many of whom
gained large commissions from the collapsed companies – and Koh says a clean-up of the industry is long overdue.
The author of a personal finance guide, Your Money Personality, to be released by Awa Press next week, Koh says, ‘These
regulations, together with further legislation now before Parliament, will expose the financial advisers who have poor
knowledge and even poorer ethics.
‘The new regime should mean that only reputable financial advisers will stay in the market, and this is a very good
thing for people seeking financial advice they can trust.’
In Your Money Personality, Koh sets out sixteen questions people should ask a prospective financial adviser. They
include his or her qualifications and experience, whether they have ties with any of the companies in which they
recommend investment, the fees and commissions involved, and whether they have professional indemnity insurance.
Koh says, ‘Even with this new law, people should look extremely closely at the disclosure statements they are given to
make sure that all this information is actually there.
‘Perhaps then, some of the financial tragedies we have seen in the past year can be avoided in future.’
ENDS