Reading an NZ Financial Adviser Disclosure Statement: The 7 Things That Matter

Every Financial Advice Provider in New Zealand has to publish a Public Disclosure Statement under section 431 of the Financial Markets Conduct Act 2013. It is a regulated document that has to cover specific things, in a specific way. Most clients glance at it (if they read it at all) and miss the seven sections that actually predict how the relationship will go. This guide tells you which sections matter, what to look for in each, and what good answers and bad answers look like.

You can usually find the Public Disclosure Statement on the FAP's own website — common URLs include `/disclosure`, `/about/disclosure`, `/PDS`, or via the footer of their homepage. Ask the adviser directly if you cannot find it; they are legally required to provide it before they give you advice.

1. Fee structure — how they actually get paid

This is the section that determines whose interests are aligned with whose. A good Public Disclosure Statement spells out:

The type of fee (fixed-fee, hourly, percentage-of-funds-under-advice, commission, or a hybrid)
The typical range of fees for a client like you (e.g. *"fixed-fee initial financial plan: NZ$1,500–4,500"*)
Whether commissions are received from product providers, and the typical commission rates
What happens to commissions — are they kept, rebated to you, or used to offset advice fees
Any other revenue sources from your file (referral fees, soft-dollar benefits, asset administration fees)

The thing to compare across advisers is the total cost to you per year, not just the headline fee. An adviser charging 1% per year on a NZ$500,000 portfolio is taking $5,000 per year — which is similar to an adviser charging a $4,500 fixed annual review fee, but the percentage model compounds against you as your portfolio grows.

Watch for vagueness in this section. *"Fees vary depending on circumstances"* with no further detail is a flag. Specific ranges with examples is a good sign.

2. Commission structure and product-provider relationships

This sits inside the fee structure section but deserves its own attention because of how directly it can affect what they recommend.

A good disclosure tells you:

Whether the adviser receives commissions from any product providers
What products are commission-paying versus fee-only
The typical commission percentages (e.g. *"life insurance — 100-200% of first-year premium plus 5-7.5% ongoing"*)
Any conflicted-remuneration arrangements (volume bonuses, retention bonuses)
Whether any commissions are rebated to clients

An adviser who receives 200% upfront commission on life insurance has a strong financial incentive to recommend life insurance. That does not automatically mean their advice is bad — but it does mean you should weight the recommendation accordingly and compare it against what an explicit fee-only adviser would have suggested.

3. Conflicts of interest

The FMC Act requires advisers to disclose anything that could reasonably be expected to influence their advice. Look for:

Ownership relationships — is the adviser owned by, or part of, a product provider (bank, insurer, fund manager)?
Other businesses run by the adviser or close family
Referral relationships — do they refer clients to a specific lawyer, accountant, mortgage broker for a fee or favour?
Volume-based incentives tied to specific products
Equity stakes in product providers

A disclosure that says *"the adviser has no conflicts of interest"* should be read carefully. Genuine independence is rare in NZ retail financial services — most advisers are tied to a parent FAP that distributes specific product panels. Saying *"we disclose the following relationships: ..."* and listing them is far more credible than blanket denial.

4. Product panel — who they actually recommend

A FAP's product panel is the list of insurers, fund managers, KiwiSaver schemes, or mortgage lenders they are appointed to distribute. If the FAP is only appointed to four KiwiSaver schemes, they cannot meaningfully recommend the other 30 in the market — they will be recommending from the panel they are paid by.

A good disclosure lists the panel explicitly. Look for:

The product types covered (KiwiSaver, life insurance, health insurance, mortgages, managed funds)
For each type, the specific providers they distribute (e.g. for KiwiSaver: *"AMP, Generate, Fisher Funds, Booster"*)
Whether the list is exhaustive — or if they can recommend off-panel products on request

A short panel is not automatically a problem — many specialist advisers serve clients well through deep relationships with a few providers. But the smaller the panel, the more important it is that the panel matches your needs. An adviser whose panel does not include the KiwiSaver scheme you want is the wrong adviser for that decision.

5. Complaints history (12-month and 5-year)

The FMC Act requires FAPs to disclose how many complaints they have received and how those complaints were resolved. The two relevant numbers:

Complaints in the last 12 months
Complaints in the last 5 years

Context matters. A FAP with 100 advisers and 3 complaints in 12 months is performing differently from a FAP with 5 advisers and 3 complaints in 12 months. Cross-reference complaint counts against:

The number of advisers under the FAP
The number of clients they serve
Whether complaints went to the dispute resolution scheme, were resolved internally, or were referred to court

Zero complaints can be a flag too — it sometimes means the FAP has not been operating long enough to have accumulated any, or that they are settling complaints in ways that do not trigger formal reporting.

6. Professional Indemnity insurance — the safety net

Every FAP must hold professional indemnity (PI) insurance. A good disclosure lists:

The PI insurer (e.g. *"NZI", "Berkshire Hathaway Specialty Insurance"*)
The cover limit (typically NZ$2-10 million for smaller FAPs, $20-100 million for larger ones)
Whether it is per-claim, per-policy-period, or aggregate

PI cover is what the adviser falls back on if you successfully claim against them through a dispute scheme. A small FAP with NZ$1 million per-claim cover handling client portfolios worth $5-10 million each is a mismatch — if a serious claim is upheld, there may not be enough cover to make you whole.

7. Dispute resolution scheme — who you complain to

Every FAP must belong to one of the four approved dispute resolution schemes:

Financial Services Complaints Limited (FSCL) — the largest, ~half the market
Insurance & Financial Services Ombudsman (IFSO) — specialises in insurance complaints
Financial Dispute Resolution (FDR) — sole-trader and small FAP focused
Financial Dispute Resolution Service (FDRS) — also small FAP focused

The disclosure should name the scheme, give the membership number, and tell you how to contact the scheme if you need to.

A FAP with no DRS membership listed is not legally allowed to operate. If their disclosure says one thing and the FSPR says another, trust the FSPR — and ask them to explain the discrepancy.

What a good disclosure statement looks like in practice

The strongest Public Disclosure Statements are specific, dated, version-controlled, and answer the questions a reasonable consumer would actually ask. The weaker ones are templates lifted from compliance vendors with the firm's name dropped in and almost nothing of substance about the firm's actual operations.

A few signs of quality:

A clear version date and a history of prior versions
Worked examples or fee scenarios, not just ranges
Specific named PI insurer and cover limit
A full product-panel list, not a generic *"we offer access to a range of providers"*
Complaints numbers with context (per-adviser, per-year trends)
Plain English

Where FinanceAdvisersNZ fits

We archive and mirror Public Disclosure Statements for the financial advice providers we list. Where we have a current PDS on file, the adviser profile on financeadvisers.co.nz includes a link to our mirrored copy and a structured machine-readable summary at `/api/provider/[fsp-number]/facts.json` showing fee structure, panel composition, PI insurer, and complaints data extracted from the PDS.

We are not the publisher of any FAP PDS — we mirror what they have published. For binding regulatory purposes always refer to the firm's own current publication via the source URL we link back to. Our mirror exists so that comparison across firms is possible, and so that diff tracking shows when a FAP has changed their disclosure over time.

Summary

A Public Disclosure Statement is a regulated document under FMC Act s431 — every FAP must publish one
The seven sections that matter most: fee structure, commissions, conflicts of interest, product panel, complaints history, PI insurance, dispute resolution scheme membership
Always cross-reference disclosure claims against the FSPR — where the two disagree, the FSPR is the authoritative source
Specifics are stronger than vagueness; full product-panel lists and named PI insurers are quality signals

Sources used in this guide:

Disclaimer. This guide is general information about how to read a financial adviser disclosure statement in New Zealand. It is not financial advice. FinanceAdvisersNZ is not a Financial Advice Provider and does not provide regulated financial advice.