Curran Clare: Financial Service Providers (Pre-Implementation Adjustments) Bill — Second Reading In Committee 
Text is incorporated into the Bound Volume 
Curran Clare: Financial Service Providers (Pre-Implementation Adjustments) Bill — Second Reading In Committee 
[Sitting date: 22 June 2010. Volume:664;Page:11964. Text is incorporated into the Bound Volume.] 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I reiterate what my colleague the Hon Lianne Dalziel said about the importance of the Government supporting Carol Beaumont’s bill on loan sharks. It is a logical progression from this Financial Service Providers (Pre-Implementation Adjustments) Bill. I also reiterate what previous colleagues have said about accountability and that this bill is about providing for accountability on the part of financial advisers just as many other professions are held to be accountable. 
As the law stands anyone can call himself or herself a financial adviser and people do not need to have any qualifications. Advisers do not need any supervision and do not have to belong to a professional body. They do not have to belong to such a body or have a formal way of dealing with disputes. Until 28 February 2008 unless advisers were asked a specific question they did not have to disclose anything other than certain criminal convictions bankruptcy and banning orders. Many of the examples of shonky financial advice have been around the marketing of financial products by people who simply did not know or understand the products that they were marketing. 
Also as has been proved and is being proved in the courts outright lies were being told. We see in the  
Dominion Post  
today a report that more charges are being laid in relation to the Bridgecorp failure case and that Bridgecorp directors Rod Petricevic and Rob Roest are scheduled to appear in the High Court in Auckland this morning to face fresh fraud charges brought about under the Crimes Act. Those charges relate to allegations that the directors lied to investors about Bridgecorp’s financial health in its December 2006 prospectus. It is also alleged that the directors lied to investors by claiming that the company had never defaulted on repaying principal or interest to investors. Today’s charges have been laid by the Crown— 
The CHAIRPERSON (Hon Rick Barker) 
: I caution the member that it is one of the practices of the House that we do not interfere with the courts. I am starting to become a bit worried. You mentioned that a court case is proceeding and I caution you that I do not want to hear any contributions that could be seen to overlap with the activities of the court. It is fair enough to refer to the fact that there is a court case but I am starting to get the hint that you are moving on to some of the substantive issues in the case. 
CLARE CURRAN 
: I will refer to some of the statements that were made by victims of the Bridgecorp collapse that were reported in the  
Sunday Star-Times  
in late 2007 to give an example of the kind of impact that this collapse has had on people’s lives. This has been talked about a number of times in this House and has resulted in this bill. 
The victims included an 81-year-old rest home resident who relied on the interest on her $80000 life savings to pay rest home bills. Another couple aged 93 and 95 were relying on Bridgecorp and Five Star Consumer Finance investments in order to pay their retirement village fees. Another couple aged 67 who lost $160000 across several bust finance companies said “We will never recover from this. We are too old and too tired to fight. We are absolutely devastated feeling that we have been robbed of our life savings by dishonest and unscrupulous investment companies.” Many investors complained that their financial advisors were still spinning them a hard sell despite the collapse and advice from the receivers that the holders of unsecured debentures and capital notes would get nothing. Another quote by one of these people said “(My financial adviser) told me not to believe what the receiver the media and the experts were saying and that we will get most of our money back. I feel that I have been misled by my financial planner. I want them to be held responsible for their negligence.” That is what this bill tries to achieve. 
From 29 February 2008 amendments to the Securities Markets Act of 1988 will change the rules on disclosure by investment advisers but not by other kinds of financial advisers. The Commerce Committee after all of the work that it did on the bill recommended that it be passed with significant changes. The committee received many high-quality submissions and took an unusual step as we have heard a number of times.