Commissions ban unlikely for NZ

Commerce Minister Simon Power says the Government has no plans to ban New Zealand financial advisers from receiving commissions.

Australia has banned its financial advisers from receiving commissions in a move to protect investors from conflicts of interest.

Power said it was critical that investors received independent and impartial financial advice they could trust.

The banning of commissions was gaining momentum internationally, he said, but the Government had no plans to follow suit.

"We are in the process of introducing a new regulatory framework for financial advisers, which would require full disclosure of commissions.

"I am confident that transparency of commissions, along with various other standards, will ensure mum-and- dad investors can make informed decisions ... and will ensure that advisers act in their best interests," he said.

The new regulations were due to come into force by December.

Power said he would need to be convinced that the new regulations were not addressing conflicts of interest before he considered banning commissions in New Zealand.

The Australian regulatory changes were part of a package of measures that would come into effect by July 2012.

Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen, said the Australian Securities and Investments Commission would be given increased powers to ban unscrupulous operators in the financial sector.

The new laws were "designed to tackle conflicts of interest that have threatened the quality of financial advice ... and the mis-selling of financial products that culminated in high profile corporate collapses", he said.

The Australian Government was strengthening its oversight of the financial advice industry as the country's population aged and its A$1.3 trillion ($1.67 trillion) pool of pensions savings increased.

A panel of Australian lawmakers found some retail investors were given inappropriate advice to invest in advisory firm Storm Financial, which collapsed last year.

- STAFF REPORTER, AGENCIES