Hudson BrettBRETT HUDSON (National): Thank you Madam Assistant Speaker. I hope you weren't anticipating my contribution with those comments. It's a pleasure to rise and speak in support of the Financial Services Legislation Amendment Bill and I think it's important we do consider as this has exited select committee why we as a Parliament would look to not only introduce but potentially pass legislation that does a great deal to regulate the behaviours of a particular part of the market—the financial services part of the market.It's well within living memory to remember the global financial crisis and the implications that had not just at a macro level on countries' economies. But if we look at the heart of it a lot of the stimulatory activities a lot of the bail-out activities that happened around the world and including New Zealand were not just to protect an institution certainly or a system; at the heart of that it was about protecting what the member who just resumed her seat Jenny Marcroft referred to as the mum and pop investors—the people who had taken what they had and what they had wasn't necessarily a great deal and had looked to invest it in reasonable return areas and found themselves compromised when something that was akin at least in parts to a house of cards collapsed.That actually brings us to the heart of why we should have regulation and legislation like this. Financial services is an area perhaps greater than many if not most where there is an information asymmetry in the transactions that take part. That is the people that offer the services or sell the products and services have a great deal more knowledge—an in-depth knowledge—of not only what they are selling but what backs it up than the consumers or the purchasers of those products and services. So they are in a natural position to potentially take advantage explicitly or simply through inaction if not direct action to encourage people down a line of investment that if they had the benefit of the same level of understanding they may not take. So when we have in a market information asymmetry it is a natural place for Parliament to consider either primary legislation or regulation or both to help to address that and to mitigate what could be very very negative consequences for consumers and indeed when enough consumers are affected the market as a whole. So I'm delighted that what has come out of the Economic Development Science and Innovation Committee is recommending some very sensible additions to make sure that there are minimum standards of competence and knowledge within the industry but that there are also standards of ethical behaviour in the nature of advice and the responsibilities that come with giving advice. It means that New Zealanders and our markets can have greater confidence that the fundamentals the foundations of our financial services markets are on a stronger and more solid foundation.I noted my colleague Mr Goldsmith the Hon Paul Goldsmith made a point—he was talking when I walked in at least—about people getting their information today on apps and new ways of interacting with service providers. It is pleasing to see that one of the changes recommended from the committee is that a prohibition on non-natural persons offering financial advice has been recommended to be lifted.Now at a very simple level people call that robo-advice but I think that as technology continues to mature—and something we've heard quite a bit about over the last couple of years is artificial intelligence—robo-advice is no longer going to be what might have been thought of in the first instance as where you ring up a telephone number and a machine answers Press 1 for this." and suddenly you get some basic or perhaps slightly greater than absolutely basic advice. Most people would understand robos because some of them have been subjected to inbound robo calls. This is a bit broader than that because what sits behind that advice is actually what the programming is what the decision making is and how that advice is constructed and offered. We will see artificial intelligence have a far greater role to play particularly when that institution knows the person that calls them and particularly if they are an existing client and they have a great deal of information on their position and their current investments.Actually that is a good thing. It is a good thing if it's used well because any company—in this case a financial services company—can offer enormous value to their clients if they take what they know about them what they know about products and services what they know about markets and what they know about other investors. They can tailor advice to them that is beyond the absolute basic and can be of greater future value to that client. But if it's done poorly it could also result in if not financial harm to that client certainly a sub-optimal outcome. So I'm very pleased that there is a recommendation to remove that restriction and to allow robo-advice which will lead to so many opportunities in the future.I am particularly happy—particularly pleased—about the provisions around a duty of priority to the clients' interests. Any business whether they are financial services or not if they have a vision of a long-term successful future for their business and their shareholders should be placing their clients' interests ahead of all else because ultimately it is that client remaining with that business or coming as return business that leads to their greatest success. So it's pleasing to see that the legislation enshrines that duty of care to the advisers. I'm also pleased along with it that there are good strong elements of pragmatism to it—a recognition for instance that no matter who the financial adviser is they can't possibly know every single product or service that might be available on the planet and particularly although there is some contention within the industry it does permit that some institutions that will only ever offer products that are their own such as banks are able to do so and not contravene the Act as long as they make that disclosure upfront. I would note that that is not without some controversy in the industry. The smaller and more independent financial service advisers that have spoken to me have certainly raised this issue that that means that there is less control or less oversight on what some of those things those larger institutions might be but I think on balance we've got it absolutely right—not close to right but absolutely right.Also the exclusions from regulated financial advice: I had a wry smile as I read through particularly new schedule 5 in schedule 2 of this bill. On the face of it if you didn't sit in the committee—and I didn't; I attained the spokesperson role for commerce and consumer affairs when the hearings were already under way for this bill—it looks like almost every profession and person you can imagine is actually excluded from giving financial advice and I breathe a huge sigh of relief that members of Parliament are included in those exclusions so feel free to talk to people about what you wish. It is right that we make some genuine effort to ensure that the law that will cover financial advice and regulated financial advice is targeting the right people the right businesses and the right sorts of services in the market place and not through an unintended consequence affecting a broad swathe of others.One of the ones I was pleased to see is that journalists are excluded. They do not offer financial advice. So for instance if I was to ask Mr Richard Harman if it would be a good idea for me to put a bet on this Government not lasting three years he wouldn't be at risk of being subject to regulation under this Financial Services Legislation Amendment Bill. So I would encourage Mr Harman to give me the good oil on what actually is going to happen because I think he has a bit of insight there.Greg O'Connor: Have a bet on Simon!BRETT HUDSON: The last part I would like to talk about—and you know things that bring Governments down for instance are when their own backbenches don't have confidence in the Prime Minister. [Interruption]ASSISTANT SPEAKER (Poto Williams): Members.BRETT HUDSON: I mean it's quite shocking isn't it? If you don't have confidence in your Prime Minister how can the country have confidence in her? The other thing—and I'd say that a practitioner came to speak to me about this—is that it's very important that the legislation we make doesn't turn off legitimate opportunities for New Zealand businesses. We have the ability to offer high quality high-integrity financial services as an export to the rest of the world and we shouldn't have legislation in place that prevents it. I'm very pleased to see that officials recommended a change that means that if you're a New Zealand exporter of financial services and you don't have New Zealand clients you can still get registered which was pleasing to see. So overall I will commend this bill to the House."