One of the key messages to advisers from the FMA’s Chief Executive is that the regulator encourages them to “innovate and think differently, to introduce new advice journeys that tap into consumer groups who are currently underserved.”
Speaking to the 550-plus attendees at the Financial Advice NZ Conference in Auckland, Samantha Barrass outlined the findings from the FMA’s Access to Advice Review which looked at challenges and opportunities for the financial advice sector, noting that 28 percent of New Zealanders accessed financial advice in the past 12 months.
In pushing her message about new advice journeys, Barrass said in her speech that too many financial advice providers seem uncertain about how to tailor the nature and scope of their advice.
“Nature and scope is really about how you give your financial advice, what you consider and don’t consider. The new financial advice regime is a principles-based regime, which means you are able to deliver advice in ways that are right-sized for different consumers, circumstances, and channels.”
She said one of the challenges with this appears to be “…that for many firms, faced with uncertainty about how to tailor the nature or scope of financial advice, the default is to be cautious and conservative, to use the six-step advice process each time. Our concern here is that this is making advice less accessible, not more accessible.”
…an approach where advisers are restricting access because they are worried about the FMA is not the outcome it’s seeking…
She says an approach where advisers are restricting access because they are worried about the FMA is not the outcome it’s seeking, suggesting advisers could talk to the FMA team at any time.
Following on from the review, the FMA will engage with FAPs and the wider sector “…to find practical ways to improve accessibility and ensure regulation supports innovation and good consumer outcomes.”
She sees improving access to quality financial advice as critical to New Zealanders’ long term financial wellbeing.
“Financial advice plays a vital role in helping people make informed decisions about their financial futures. Our review shows there is significant opportunity to expand access to advice so more New Zealanders can benefit from it.”
The Access to Financial Advice Review brings together insights from nationwide consumer research and engagement with financial advisers, financial institutions and industry bodies.
…the review confirms what advisers are already seeing on the ground…
Financial Advice NZ CEO Nick Hakes said in a statement that the review confirms what advisers are already seeing on the ground.
“Great advice transforms lives. But right now, too many New Zealanders are making major financial decisions about KiwiSaver, debt, insurance and retirement without any support. This review makes the scale of that problem impossible to ignore.”
He points to the review identifying several barriers, including cost perceptions, low awareness of what advice involves, and also reiterating Barrass’ point on uncertainty within the sector about how to deliver advice in a proportionate and accessible way.
Hakes also noted the findings point to a clear need to rethink how advice reaches people.
“There is a real opportunity to provide more targeted, right-sized advice rather than assuming every client needs a full, complex process. That shift is critical if we want to reach more New Zealanders, particularly those who currently feel advice is out of reach.”
The review also flagged growing demand for support at key life stages, particularly as more New Zealanders approach retirement with KiwiSaver balances and need guidance on how those funds are used over time.
FANZ said its focus now turns to working in partnership with the FMA and the wider sector to translate the findings into practical change.
Other findings
The FMA notes that the review found that 28% of New Zealanders accessed financial advice in the past 12 months, with people from lower socio-economic backgrounds and some ethnic groups, including Māori and Pasifika communities, significantly under-represented. Many consumers reported uncertainty about what financial advice is, how to access it, and how much it costs.
It says the review identified a range of structural, cultural, and operational barriers across the advice landscape.
Accessibility challenges are more pronounced for Māori, “who encounter barriers including a lack of culturally aligned advice models and tools,” Barrass said.
She also pointed to a significant gap in the availability of advice to support New Zealanders with retirement decumulation.
Innovation is seen as a key area of opportunity for increasing accessibility. Technology-enabled and hybrid advice models, including digital tools and AI-supported advice processes, could make advice scalable and more consistent with the right design and oversight.
“Technology can automate parts of the process that currently take advisers a lot of time, freeing them up to focus more on the human conversations that consumers value,” Barrass said.