There's a new push in Australia to make the list of financial advisers more transparent - no such move is underway here in NZ. Image / Thinkstock
There's a new push in Australia to make the list of financial advisers more transparent - no such move is underway here in NZ. Image / Thinkstock
Opinion by
Thanks to a maverick mining magnate and a petrol-head politician, the Australian financial advisory industry will soon be open to wider public scrutiny.
In a bizarre deal struck this July between the Coalition government and two independent senators - billionaire-turned-politician, Clive Palmer, and Ricky Muir of the AustralianMotoring Enthusiasts Party - all of the country's financial advisers will now appear on the so-called 'enhanced public register of financial advisers'.
As well as consolidating existing official information and including more detail (such as qualifications), the new register, announced late in October , will for the first time reveal the industry's underbelly of employed financial advisers.
Due to the nuances of the Australian licensing system, employed financial advisers (typically sitting on the payroll of banks) have until now escaped mention on official records.
Australian advisers are registered primarily through a licence-holder rather than as individuals. Meanwhile, New Zealand has a multi-tiered licensing system with some advisers individually registered with the regulator and others managed under direct control of a so-called Qualifying Financial Entity (QFE).
Currently, the estimated 25,000 individuals who are potentially giving financial advice under the auspices of QFEs remain officially invisible.
A further 6,000 or so Registered Financial Advisers (RFAs) - mainly insurance advisers - have not been assigned a searchable public register (although, a bit of digging around in the Financial Services Provider Register, or FSPR, will unearth some RFA info).
While it's a useful starting point, the AFA register is rudimentary, providing little more than a name and vague geographical position.
Amongst other juice, the super-charged Australian adviser register will include details about: membership of industry organisations; career history; bans, disqualifications or other regulatory action, and; ultimate ownership of the advisory business.
In a statement, Australian Finance Minister, Mathias Corman, said the new register "will help drive improvements in consumer confidence in the financial advice industry and ensure people receive advice they can trust".
"It is critical that Australians have unhindered access to information on their financial adviser and the company employing the adviser," Corman said.
New Zealand could do with some of that transparency too.
However, a register upgrade isn't on the regulator's current agenda, according to a spokesperson for the Financial Markets Authority (FMA), but the regulator is keeping a close watch on developments in Australia.
"We have no immediate plans to update the AFA list on our site. The FMA established its register of AFAs after licensing was introduced to help people find an adviser in their area. The complete register of NZ financial services providers is the FSPR. We are considering updating the information on our website as part of the review of the FAA that will be underway next year, " the FMA spokesman said.
