1 / 11

Addressing the Regulation of Investment Advisers: Insights from the 2002 NZSOA Conference

In this 2002 conference paper by Brian Lenehan, the importance of regulating investment advisers is explored. With a focus on recent developments by the Securities Commission and international regulatory practices, Lenehan emphasizes the necessity for actuaries to be mindful of their advice-giving roles amidst a weak regulatory environment in New Zealand. The paper argues for a broader understanding of investment advice and highlights the implications for actuaries, particularly concerning professional indemnity and the need for higher standards. It stresses that while regulation can enhance market efficiency and consumer protection, there are also risks of stifling personal freedoms and increasing costs.

tacy
Télécharger la présentation

Addressing the Regulation of Investment Advisers: Insights from the 2002 NZSOA Conference

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Regulation of Investment Advisers NZSOA 2002 Conference Paper by Brian Lenehan Personal Views Only

  2. Why I wrote this paper ? • Topical subject - recent Securities Commission review, FSRA in Australia and UK actuarial profession report • Little non-government research on this topic • My view is actuaries are possibly complacent re their responsibilities in this area

  3. Why is investment advice important ? • Assist individuals in managing their affairs • Success of free market economy • Plethora of investment options • Alleged unsophisticated consumers

  4. What is investment advice ? • My view is a wide definition is the best option • NZ legalisation defines as a “recommendation, opinion or guidance in relation to buying or selling securities”. The definition of securities is very wide and includes superannuation and other investments.

  5. Involvement of actuaries • Many give no advice • Incidental advice common, e.g. for superannuation schemes • Wholesale work could be advice • Actuaries should be aware of PI implications • Setting future expected rates of return

  6. Current regulatory environment ? • Relatively weak in NZ • Some moves for tightening • No registration or minimum standards in NZ • Registration common offshore

  7. For more regulation • Current open slather position re min. standards • Less fraud / poor advice • IOSCO standards • Investor protection • Better market efficiencies

  8. Against more regulation • Control by state impedes on personal freedom • Extra costs will be borne by consumer • Poor advice may happen anyway • Moral hazard • Compulsory Registration may create lazy monopolies

  9. Options for NZ • Status Quo - likely in short term • Minor Changes - likely in medium term • Tight regulation - seems unlikely unless there is a major scandal.

  10. Implications for actuaries • Often give investment advice without realising • Professional standards in investment area are light - eg no standards on rate of return estimates for defined contribution super • PI cover implications • As a professional body we should strive to act in the public interest

More Related