Prime Willow-Jean; Rurawhe AdrianWILLOW-JEAN PRIME (Labour): Kia ora Mr Assistant Speaker. I'm really pleased to take a stand on the first reading of the Financial Services Legislation Amendment Bill. I wanted to start on a lighter note but then get into a more serious conversation about it. I wanted to start by acknowledging my first financial adviser—that being my mother. She's just left the House with the baby so I'm hoping that she is listening on Parliament TV next door in the whānau room. But yes mum was my first financial adviser and when I look at this legislation that we are introducing to the House here I don't think she would meet a lot of those criteria. But I do want to acknowledge her.I also want to acknowledge that as the Labour Party we understand that financial decisions can have a huge effect on people's lives and the wise use of money can dramatically improve people's quality of life and their ability to support their family. In fact we believe that financial literacy and budgeting is so important that we will create a school-leavers' tool kit to equip school-leavers with vital life skills including having financial literacy and budgeting skills and where they can learn about things like KiwiSaver—which we have talked about in the House—tenancy agreements and credit cards etc.But we need to take that a step further. In addition to that we need to improve access to and improve the quality of financial advice for New Zealanders. We need to make it easier for people to access financial advice and to make more confident and informed financial decisions. In particular people with simple needs or low levels to invest need to be able to access the financial advice that they need. So it is with that that I come to this bill and those are some of the proposed benefits of this bill. The overall objective of this bill is to promote the confident and informed participation of consumers investors and businesses in financial markets. I want to thank the Ministry of Business Innovation and Employment (MBIE) for their review of the Financial Advisers Act 2008 and the Financial Service Providers (Registration and Dispute Resolution) Act 2008. In 2008 when these Acts were passed bringing into effect the current regime and regulating financial advisers for the first time in New Zealand the regime lifted professional standards by requiring financial advisers to be accountable for their advice and to meet minimum conduct obligations. It has improved redress by requiring those who provide advice to retail consumers to belong to a dispute resolution scheme. MBIE were required by the statute to review these Acts within five years of their commencement and I want to thank MBIE and the many many submitters. There were over 400 submissions more than 800 survey responses and many people who attended workshops and seminars.The review found that despite positive changes there are a number of issues with the current regime which are hindering investor confidence participation in financial markets and informed decision-making. The issues were that some types of financial advice aren't being provided and we heard that earlier particularly around KiwiSaver which was highlighted in an additional report. The current regulatory provisions are limiting the type of advice provided and advice gaps are appearing in areas where it is expected more New Zealanders may want advice. That was most starkly highlighted by the lack of personalised advice on KiwiSaver. The member who spoke earlier Michael Wood highlighted those dim statistics.The review found that the different levels of regulation that currently apply in the different situations have created a real disincentive for financial advisers to give personalised advice but there were other issues including the quality of financial advice that may be suboptimal. Compliance costs are unbalanced there are inefficiencies and unnecessary complexity is preventing adequate consumer understanding due to terminology and definitions that are confusing and disclosure statements that are unwieldy and that do not contain information that people need to make informed decisions.It was said that the regime is overly complex. The various tiers of the advice and the advisers are not helpful for consumers and are frustrating for advisers—for example having the term registered" and the term "authorised" being used. Those two terms are confusing and perhaps indicate that there may be some form of hierarchy which is not the case. Disclosure ensures that consumers have sufficient information about the person providing them with financial advice before actually engaging their services. However current disclosure documents are too long they're too complex and they are jargon-filled and so they often end up not even being read and even if the statement is read by consumers it's far too complex for most and does not contain the information consumers need to make informed decisions.So what does the bill do to actually solve these problems? Well in particular to address the unnecessary complexity that is preventing adequate consumer protection and understanding the regime will be simplified as the bill removes many of the different categories and boundaries that existed in the Financial Advisers Act. As all financial advice will be held to the same standard consumers will be able to get advice and be confident in the knowledge that it is held to good standards. The bill also requires everyone who gives financial advice to ensure that the client understands what the adviser can actually do for them including what limitations there might be on the advice that they can give.So carrying on the theme of modernising our legislation and making it easy to understand I spoke earlier this week about the Trusts Bill on a similar issue. This bill will introduce more meaningful plainer English disclosure statements which are prescribed in regulations and which will ensure that consumers can make better informed decisions.Carrying on with the theme of modernising our legislation to accommodate the technological advances that we have heard about in the House this week this bill is technology-neutral and as a result it is believed that it will better enable innovation. For example the bill enables robo-advice and it is believed that robo-advice could significantly improve the availability of advice for those consumers who are not currently getting any financial advice at all. I'm interested in the submissions on this through the select committee process. In particular this section is being amended to remove natural persons which will allow flexibility for the use of technology and for future innovation.In conclusion I just want to conclude by highlighting that this is all about improving access to and improving the quality of financial advice for New Zealanders making it easier for people to access financial advice and to make more confident and informed financial decisions—in particular having people with simple needs and lows levels to invest being able to access the financial advice that they need. It is with this that I am happy to commend the bill to the House and I commend its referral to the select committee.The ASSISTANT SPEAKER (Adrian Rurawhe): This is a split call—five minutes."