New Zealand should join forces with Australia in building a financial services hub in the Asia-Pacific to take advantage of fast-growing nations in the region, according to a new report.

The government-appointed International Funds Services Development Group, led by funds management veteran Craig Stobo, says New Zealand should link up with its trans-Tasman neighbour to beat out rivals in setting up a back office for the region's financial services.

"It is the view of the IFSDH that Australia is positioning itself as a centre for asset management services, it should be seen as our most logical target for administration services, and that it is potentially a complementary partner in servicing the Asia-Pacific region," the report said.

The hub, which Prime Minister John Key has championed as a means of building the nation's wealth, will require major tax and regulatory reform, such as the pending legislation to cut Portfolio Investment Entity tax on foreign-sourced income to zero.

Oliver Wyman research commissioned by the group suggests New Zealand could add between 2000 and 5000 legal, trustee and accounting jobs by 2020/2030, and generate revenue of between $500 million and $1.3 billion a year, adding between $150 million and $360 million to the country's tax-base.

The report recommended a two-stage process where the regulatory framework is put in place by the end of next year, followed by a coordinated bid to attract business for the domicile. Though challenging, the group concluded it is achievable.

David Carter, Acting Economic Development Minister, said the government is mulling its options over the report's recommendations, but is already making some tax and regulatory changes.

The report was received in February, before the Christchurch earthquake, and then-minister Gerry Brownlee decided to assess the benefits of setting up a local funds domicile, and asked Commerce Minister Simon Power and Revenue Minister Peter Dunne to consider growth in financial services exports in all future regulatory changes, according to a Cabinet paper.

Government officials told Brownlee "there can be no guarantee of success and that other jurisdictions with similar ambitions have seen limited reward for their efforts."

Treasury said for more work to be undertaken, it would be "necessary, but not sufficient" to attract broad community and political support.