The Changing Role of Financial Advisers

Read More

Adviser2The Changing Role of Financial Advisers

Financial advisers have been working under their new regulatory framework for nearly three years and many have changed the way in which they operate over that time. In 2011 the Code of Professional Conduct for Authorised Financial Advisers, which sets clear standards for the provision of financial advice, came into force. Since then, many advisers have been the subject of audits by the Financial Markets Authority to check on their compliance with the Code and legislation such as the Financial Advisers Act (2008). The FMA continues to work on policies and regulations that will broaden the regulatory framework for advisers.

The administrative and financial burden of complying with the new framework has seen many advisers either leave the profession or align themselves with an adviser group to access support and share costs. Sole practitioners are becoming a rarity.

Perhaps the most interesting changes is that investment advisers are more reluctant to construct and manage client investment portfolios comprised of direct investments in specific shares and bonds or single sector managed funds (that is, a fund that invests in only one asset class such as shares). Instead, advisers are increasingly recommending ‘model’ portfolios developed by research houses or diversified managed funds within which the fund manager makes decisions about the underlying investments and changes to the asset allocation. The role of financial advisers is becoming one of working with clients to understand their needs, matching them with investment solutions researched and recommended by technical experts, and broadening out the range of advice in a holistic way to cover such areas as achievement of goals, budgeting, estate planning and general financial advice. This is as it should be. Advisers should spend the bulk of their time working on developing relationships with their clients rather than pretending to be experts on investment selection.

Related Articles

Liz Koh

Budget Winners and Losers

The latest Government budget had something for everyone but while most households will be a few dollars a week better off, there are some clear winners and losers. In the winners’ corner are businesses, those on high incomes, and savers. The biggest losers are property investors who have built large portfolios financed partly by tax rebates.

Read More »

Top Up or Miss Out

The end of June is an important date for KiwiSaver members. The financial year for KiwiSaver runs from 1 July 2009 to 30 June 2010 and if you have contributed at least $1,040 to KiwiSaver during that time, you will be eligible for the full amount of Government tax credit to be paid into your KiwiSaver account in July.

Read More »

Responsible Investing

There is a worldwide trend for investors to want to make a positive contribution to the world by investing in companies that are socially and environmentally responsible. If you are passionate about the effects of climate change, the scarcity of food and water, and social or environmental policies in general, then you will no doubt wish to ensure that the companies in which you invest are going about their business in a manner that is consistent with your views.

Read More »

Helping You Live your retirement To the Max

Keep in touch

Fill in your details and we’ll get back to you in no time.