New rules forcing investment advisers to disclose more information, including commissions, come into force tomorrow.
Commerce Minister Lianne Dalziel said the rules would be a "leap forward" in giving investors extra protection.
"Anyone who gives investment advice to clients will have to provide more information up-front especially about
how they are being paid to recommend particular investments," Ms Dalziel said.
"Disclosure is mandatory and must be made without the client having to ask for it."
Under the law investment advisers must:
* disclose their qualifications and experience;
* disclose any criminal convictions;
* disclose their fees, as well as commissions and any conflicts of interest;
* provide the details of the financial products in question.
The law also requires them to act with integrity, reasonable care and diligence and avoid misleading or deceptive conduct.
The new rules also beef up the Securities Commission's powers to police investment advertising.
It will be able to censure those who use misleading advertising which includes seminars, distributed material and other promotions.
- NZPA
