700 advisers may have to stop giving KiwiSaver advice

As many as 700 financial advisers may have to stop giving advice on KiwiSaver, managed funds and other investment products from July because they do not have the appropriate qualifications under new rules.

Financial adviser regulations come into full effect from July 1, making it an offence for unlicensed financial advisers to provide retail clients with personalised investment planning services and financial advice on investment products.

Just over 600 advisers have been authorised to date and despite being able to apply since August last year 700-plus advisers still had not completed the competency assessments required, said Financial Markets Authority (FMA) director of financial adviser regulation Mel Hewitson.

Nearly 400 of them need to do an assessment which can take three to five weeks to get through.

"It's clear they're running the very real risk they won't be authorised in time," Hewitson said.

The FMA had set June 17 as the target date to process those advisers who had sent in full and complete applications to allow them time to notify their clients they can continue offering investment services, she said.

The FMA would be checking advisers who applied but did not make the deadline and would take action against any person falsely claiming to be an authorised financial adviser after July 1.

- NZPA