Money to regulate financial advisers

Commerce Minister Simon Power says today's budget will grant the Securities Commission an additional $11.8 million over four years as it moves to regulate financial advisers.

Power said the commission would have its budget boosted to the tune of $2 million in 2009-10, $4 million in 2010-11 and $2.9 million in each of 2011-12 and 2012-13.

Under the Financial Advisers Act and the Financial Service Providers Act the commission will be the central regulator overseeing financial advisers.

The two acts are aimed at introducing a minimum standard of competence for financial advisers and come after advisers were heavily criticised for their role in the collapse of dozens of finance companies, which put billions of dollars of investors' savings on the line.

This extra cash will bring the total available for the new financial advisers' regime over these years to $3.4 million, $5.4 million and $4.3 million, respectively. The regime is expected to be implemented by the end of 2010.

Power said he would keep funding requirements under review but expected the regime to be fully funded through industry fees and levies from 2011-12.

The commission's total income for 2008 was just $10 million. Of that, $6.5 million came from a government grant and $2 million from its litigation fund.

Power said the increases to funding stemmed from fees.

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