Budget 09: Boost for adviser watchdog

The Government has trebled funding for the Securities Commission's new responsibilities in overseeing financial advisers over the next four years, raising it from $5.6 million to a total of $17.4 million.

Advisers will meet the cost of the increase through fees. The previous allocation for the commission's new role in overseeing advisers was $1.4 million a year. That has now been boosted by a further $2 million in 2009/2010, $4 million in 2010/2011 and $2.9 million in each of the following two years, adding up to an additional $11.7 million

The commission was rumoured to be struggling to meet its new commitments under the regime, which should be fully in place by the end of next year, on its existing budget.

The new regime provided for by the recent Financial Advisers Act and Financial Service Providers Act "will help restore confidence in the financial markets by introducing a minimum standard of competence for financial advisers," Commerce Minister Simon Power said yesterday.

The commission's funding requirements would continue to be reviewed but the financial adviser regime was expected to become fully self-funding by 2011/2012 by way of industry fees and levies.

Outspoken financial adviser Chris Lee, who has lobbied for more stringent regulation of the industry paid for by advisers through fees, welcomed Power's announcement.

"I'm delighted to hear there's $11 million in extra funding to go to the Securities Commission although I think they would really need more than this."