The various designations for advisers in New Zealand leave consumers confused, AMP has warned.

The profession currently includes authorised financial advisers, registered financial advisers and qualifying financial entity advisers, each with different licensing requirements.

“We believe having different types of adviser categories creates consumer confusion,” AMP says in a submission to the Financial Advisers Act review. “In particular, allowing advisers to use the term registered financial adviser may mislead the consumer into thinking they are getting advice from an adviser who is more qualified than they actually are.”

AMP says consumers cannot be confident in a regime they do not understand.

“If a consumer cannot understand the difference between the various types of adviser, then they cannot make an informed decision about what type of adviser to use.”

Asteron agrees there must be clarity about the type of financial advice being provided.

“We think financial advice and selling (we prefer to look at information only as a service) is a continuum and one that should be applied flexibly and in accordance with the needs of the customer,” its submission to the review says. “We know the sector finds the law relating to personalised advice, class advice and information-only selling confusing.”

Asteron says Financial Markets Authority guidelines on advice for KiwiSaver are now used unofficially for all types of financial advice.

“We understand this document is often used to interpret the difference between personalised advice, class advice and information-only selling for any type of financial product,” the submission says.

AMP wants one category of advisers who are properly qualified to cover the sectors they work in.

“The focus of the legislation should be on the consumer and consumer protection,” it says.

“Ensuring advisers are appropriately qualified and capable to provide advice on the areas they specialise in must be a legislative goal as part of this.”

AMP proposes that registered financial advisers should be licensed only if they can demonstrate competency in their particular areas, including understanding professional and ethical obligations and undertaking ongoing development.

“A registered financial adviser who is unwilling to assume these greater responsibilities would be a financial product salesperson under our model.”

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