Hon. Andrew Bayly Speech for Financial Advice New Zealand THRIVE Conference.

Acknowledgements and opening 

  • Morena, Nga Mihi Nui.  Ko Andrew Bayly aho, Nor Whanganui aho. Thanks Nate for your Mihi Whakatau
  • Good morning. It’s a pleasure to formally open your conference this morning. What a lovely day in Wellington, What a great building to deliver this marvellous symposium.
  • I love the theme of this years’ conference “Thrive” – as a Government, we want everybody in New Zealand to Thrive
  • First off, a big thank you Tony  for introducing me and my thanks to Financial Advice New Zealand for inviting me to speak to you today. Congratulations also Nick on your appointment as CEO, I’m really looking forward to working with you as we progress financial services reforms, taking over from Katrina Shanks with her impressive work as CEO before stepping down in November last year
  • I’d like to take a moment to acknowledge the continued success and fantastic work of Financial Advice New Zealand as a representative body. I also want to thank your Board and Chair, the Hon Heather Roy, for the work you do for your sector. It’s crucial to have a platform which the financial advice community gather to connect and share the breadth of expertise that exists in this sector.
  • And to all the financial advisors in the room, I would like to reiterate that you play a crucial role in supporting Kiwis to make significant financial decisions, especially through these challenging economic times. You are at the frontline for understanding client needs, supporting their investment and savings decisions, and a critical source of knowledge for all of us.
  • Some background on myself. As some of you may be aware, before entering politics, 9 years ago, I had a 25-year involvement in the financial services sector. I owned a merchant bank and many other businesses, and held a number of board roles. One such role was the independent chair of a financial planning company. As such, I have been at a few conferences before.
  • I don’t need to tell you that it’s a tough time out there for a lot of Kiwis feeling the pinch. Many are facing financial difficulty, with rising living costs and interest rates. We have seen more serious financial hardship withdrawals from KiwiSaver than home ownership withdrawals over the past year. But it is you as financial advisors who  play a crucial role in supporting Kiwis to build financial resilience, providing much-needed stability and advice in the face of uncertainty.
  • It is not just about weathering the storm though. It is vital to grow a strong financial advice sector so that individuals and families can plan for their future, whether that means saving for retirement, buying a home, or investing in the long term. Economic priorities
  • I want to talk about some of our broader economic priorities that are shaping our agenda as a Government. In our first 100 days, we have been focused on laying the groundwork for a strong and sustainable economic recovery, one that creates jobs, boosts productivity, and ensures that all New Zealanders have the opportunity to prosper.  
  • Our 100-point plan for Rebuilding the Economy outlines a range of initiatives aimed at achieving these goals, from investing in critical infrastructure, to cutting red tape and supporting small businesses.
  • We have already made great progress on these initiatives.
    90-day trial periods have been re-enacted. Fair pay agreements have been repealed. The Reserve Bank’s dual mandate has been amended to focus only on reducing inflation. And just this week we will begin repealing the Business Payment Practices Act in the House.
  • There’s still more work to be done, however, and financial services reform is a key part of our agenda.

Financial services reforms 

  • Since the introduction of the Simon Powers reforms in 2008 and the Financial Markets Conduct Act in 2013, we’ve seen successive changes in the world of financial regulations.
  • In essence, the legislative architecture governing the financial services sector  has become too complex.
  • All these new regulations have created confusion among market participants. While the changes were well intentioned, the reality is that they were failing to deliver optimal outcomes for Kiwis and businesses alike.
  • To address these issues, I am working on a series of reforms for the financial services sector. We’re starting by looking at the affordability regulations in the Credit Contracts and Consumer Finance Act (CCCFA) as part of our coalition agreement with the ACT party, then moving onto the broader review of the CoFI Act. As part of this effort, I’m also considering ways to improve the efficiency of the financial dispute resolution system.
  • On a related note, I am concerned about the impact of an overbearing regulatory environment and its effect on financial advisors. Whilst the FMA did a good a job in transitioning advisors into the new licensing arrangements last March, none the less we need to ensure the industry remains a place that people wish to work in.
  • Second, I am also concerned that over regulation inevitably leads to advisors being less prepared to offer appropriate financial advice. This is wrong. More than ever New Zealanders need to be able to access good financial advice and it shouldn’t be only the wealthy being able to access this advice.
  • As a country many of us are not saving sufficiently for our retirement. The cost of superannuation is increasing significantly and our contributions to KiwiSaver are relatively modest. It is fundamental we do more to support more New Zealanders to save for their future.

Move back to twin peaks model 

  • So what we are planning. It is my intention to revert to a clearer “twin peaks” model in respect of financial regulation. Over time, the lines have blurred. Certain entities often find themselves regulated by three different institutions at once, which I’m sure you would agree is convoluted.
  • I’ve proposed a streamlined approach to achieve this clarity. The Reserve Bank of New Zealand will focus on it’s mandate as the sole prudential regulator, while the Financial Markets Authority would assume the role of sole conduct regulator. To achieve this, I am proposing transferring the responsibility for CCCFA conduct from the Commerce Commission to the FMA. Additionally, we’ll work on refining the existing operational arrangements between the RBNZ and the FMA to ensure smoother functioning.

Conduct licensing 

  • It’s no secret that the current conduct licensing requirements are a headache. Holding multiple licences has become both costly and burden-some for entities, which is why I will be consolidating these into a single conduct licence. I propose to implement this next year.

CoFI Act requirements

  • I also intend to perform a targeted review of CoFI to make sure it is up to scratch.
  • While the overall framework is solid, I want to ensure that the conduct obligations on financial institutions are proportionate to the risk of harm, are clear, and flexible for institutions  to implement in their own businesses.
  • I do not want to discard CoFI, but rather  ensure that good conduct obligations are proportionate and fit-for-purpose, acknowledging the positive general framework. This includes two aspects;
    1. Reinforcing the principle that the responsibility for determining what is an appropriate fair conduct programme lies with the applicant.  This means that liability lies with the directors and management and the board to identify key risks in areas of concern and develop their fair conduct programmes accordingly.  In essence, this represents a move to a tailored and proportionate approach; and
    2. Requesting the FMA to issue clear guidance for smaller institutions to meet minimum requirements of conduct.
  • I am keenly aware that financial advisers don’t always have the same resources as large financial institutions. That’s why it’s important to me that the regime doesn’t increase your costs of doing business. Your ability to provide financial services shouldn’t be hindered by unnecessary red tape or expenses.

Streamlining Financial Dispute Resolution schemes

  • As mentioned earlier, I’m exploring issues around the financial dispute resolution system, and questioning whether it is efficient and effective to have four approved schemes in place as we do now.
  • What I would like move to is a more streamlined system with improved consumer awareness and KPIs operating within these schemes.

Insurance Contracts Act

  • I expect you’ll be curious to hear what is happening with the Insurance Contracts Bill under the new Government.
  • I’ll firstly acknowledge that I am keen to ensure this work is progressed, so insurers and policyholders have greater certainty about the deals they’re striking.
  • That’s why I plan to seek cabinet approval to introduce the bill in the coming months
  • I’m well aware insurers want to know what their obligations will be under the new Bill, and be assured I am working with officials and stakeholders to finalise my views on the Bill.
  • I want to emphasise my decisions will be guided by my goals to promote clarity and certainty for insurers and policy holders, while also ensuring that regulations remain proportionate and risk-based.


  • Looking ahead, there is plenty on the horizon. I am eyeing up some changes to our capital markets settings to give Kiwi businesses a leg up. Additionally, I’m keen to review KiwiSaver settings to help New Zealanders save more for retirement, and support more capital flowing into New Zealand businesses. I’m looking forward to diving into this more later this year.

Companies Act

  • The Companies Act is an important piece of legislation. It provides the operating framework for all New Zealand companies, including those in the financial services sector. It has been an important part of the corporate landscape for decades.
  • But it’s now 30 years old. I think aspects of it are out of date and could be improved. To this end, I’m considering how it might be improved, and how these changes might be progressed. This is an important project. Rest assured, I will provide more details on this further down the track.
  • In essence, what we want to do is simplify, modernise, and digitise the Companies Act.

Financial Literacy

  • I am increasingly looking at poor financial literacy in New Zealand.  There are two elements to this; namely, what we do with students at school to give them a greater understanding, and, second, what we do to support adults to improve their financial literacy.
  • There is a number of good digital programmes out there and we need to look at how these are delivered. The Retirement Commissioner has a important role to play in this process.


  • In closing, I reiterate the Government’s unwavering commitment to improving outcomes for all New Zealanders. A thriving financial advice sector will be instrumental in achieving that goal.
  • I commend the Financial Advice New Zealand team for putting together a great theme for this years’ conference.
  • The Government’s goals and reforms to financial services legislation align well to growing a thriving financial advice sector, aimed at transforming the financial health, wealth, and well-being of all New Zealanders.
  • We want our country to be seen as a haven for talent, capital and innovation. This transformation starts right here with you.
  • I’m very confident that the reforms I’ve announced will move us closer to our shared vision. I firmly believe Kiwis will be better off for it.
  • Thank you again for having me. I look forward to continuing to work with you to help Kiwis, and the country as a whole, to be financially better-off.

Tena Kotou, Tena Katou, Tena Katou Katoa 


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