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Real estate agents and front-line bank staff, including tellers, will be required to register as financial advisers and join an approved professional body and a client dispute service under new finance-industry rules announced this week.
But the Real Estate Institute (Reinz), which is set to be relieved of
its role as the industry's frontline regulator, plans to seek an exemption for its members from the new regime.
Under the rules unveiled by Commerce Minister Lianne Dalziel on Tuesday, real estate agents who deal in investment properties are among professional groups required to register as financial advisers.
Only those giving opinions, recommendations and guidance on investment property - and not primary places of residence - would be considered financial advisers.
Responding to questions from National's commerce spokesman Simon Power during a select committee meeting yesterday, Dalziel underlined the Government's intention that agents who provide information on the yield of a rental property or related advice to potential buyers, should be placed under the new rules.
Inclusion of rental yield information in advertising "would probably take them over the line", she said.
However, a spokesman for the Real Estate Institute yesterday confirmed it would be seeking an exemption. Reinz president Murray Cleland did not respond to calls.
While Dalziel said there would probably be nothing to prevent Reinz from becoming an approved professional body, the incentive for it do so is diminished by the likelihood that compulsory membership of the institute may end within a few years.
Last month, Associate Justice Minister Clayton Cosgrove proposed setting up an independent Real Estate Licensing Authority with investigative powers to oversee the industry and better protect consumers.
The move was prompted in part by concerns about the toothlessness of the institute's client dispute service.
Membership of the new body would be mandatory, and compulsory membership of Reinz would end.
Meanwhile, Power also raised concerns that front-line bank employees, such as tellers, giving information about products such as high interest savings accounts, may also be deemed to be giving financial advice.
Dalziel said bank tellers simply giving information on available interest rates would not be covered. However, "if they look into your account and see you have $5000 sitting there and say there is a better way of investing it, I'm sorry, that is financial advice".
Bankers' Association chief executive Alan Yates said while anybody giving financial advice appeared to be covered by the new rules,"we've got to see the detail".
"There are some things which may alleviate some of those potential issues."
They included the provision for corporate membership of approved professional bodies and exemptions for certain banking products, including savings accounts and term deposits under existing securities legislation.
Currently, banking industry customer dispute resolution is handled by the Banking Ombudsman.
Changes ahead
* Real estate agents and bank tellers will be required to register as financial advisers under new finance-sector rules.
* The Real Estate Institute plans to seek an exemption for its members.
* The Bankers' Association is looking for work-arounds and is awaiting more details.
