NZ insurance brokers have welcomed changes to the Financial Service Providers Bill, which clarifies how they will be treated under the new regime. But they’re not happy with the way “broker” has been defined.

The NZ Parliament’s Commerce Select Committee last week released a report into the Bill, which includes a number of amendments.

The legislation currently separates products about which financial advice is given into two categories, with category 1 including complex products such as futures contracts and securities. Advice about these products must be provided by authorised financial advisers.

However, category 2 applies to simpler products such as general insurance, with advice to be provided by “registered financial advisers”, a less stringent qualification level than an authorised financial adviser.

The Insurance Brokers Association of New Zealand Inc (IBANZ) says the new amendments address previous uncertainty surrounding the definition of “financial planning services” that had the potential to shift general insurance products into category 1, which would have required brokers to become fully authorised.

“They’ve certainly addressed one of the key problems that we had with the legislation which was the [previous] definition… of ‘financial planning services’,” CEO Gary Young told insuranceNEWS.com.au.

“The [select committee] listened to us and… have refocused the definition on just investment rather than financial planning or needs analysis. That is a really good change.”

But one area where IBANZ has been disappointed is the Bill’s continued use of the term “brokers” to describe people who handle money, and “broking services” as the process of handling money.

“It’s silly to say that a broker is no longer what everybody understands a broker to be, but somebody who just handles money,” Mr Young said. “That is not right, it is a bit like calling Auckland Hobart.”

The new amendments to the Financial Service Providers (Pre-Implementation Adjustments) Bill still need to be passed by Parliament. A new timetable for implementation is yet to be announced.