Moving from charging commissions to fees was a means to build investor confidence following the many finance company failures in New Zealand, and the impact of the global credit crisis, which had "created financial havoc", Mr Arkinstall said in a statement yesterday.
In Australia, various industry associations for product providers and investment advisers were promoting the change from commission to fee for services in respect of investment products, and it was "inevitable New Zealand will follow this change", he said.
"Phasing out commission will remove the suggestion that investment advice is related to the level of commission available to the adviser, rather than [in] the best interests of the consumer."
While commissions were an effective way of spreading the cost of investment advice, and made investment more affordable, the down side was that financial advisers would charge a fee for investment advice.
"For some small investors, being required to pay a fee may restrict access to some investment products," Mr Arkinstall said.
