Newpark is one of a few groups that does not want members to operate under its FAP licence. Instead, it wants members to become their own FAP.
The licensing issue has caused concern with the major banks, who are said to want advisers to operate under their group's FAP. Small groups have complained this stance favours bigger players.
Andrew Scott says Newpark is “coming to an agreement” with lenders around the new regime. He says this is likely to involve building a “principles-based approach” around duty and obligation into its broker agreement, and enforcing independent audits each year.
Scott says his advisers will have to be independently-certified each year to make sure they continue to adhere to the banks' standards.
“I like that approach as it allows the advisers to manage costs. If they stick to the standards, the audit should be straightforward.”
He says Newpark will make some changes to its broker agreement to give confidence to lending partners.
“It will allow businesses to maintain independence and integrity while giving the banks a great deal of comfort,” he said.
The banks are yet to formalise their position on how they will treat individuals and businesses that take FAP status, leading to confusion among smaller players in the market.
After positive talks with two lenders, Scott said Newpark would take a FAP licence at group level “to give banks a degree of comfort”. He said this would not change the group's stance on wanting members to have their own FAP.