Melanie Purdey, chief executive of Newpark, is concerned about the lack of clarity between lenders, groups and advisers around the forthcoming new regulation.
She believes BNZ's position – working only with groups who take financial advice provider status – could lead to liability issues for adviser groups.
Purdey believes forcing groups to take a FAP licence and total liability for members shifts an unfair amount of liability onto head groups.
She told TMM Online: "We are stuck in the middle. There seems to be a distraction around liability. The bank is saying 'we won't be liable, you be liable'. Advisers are saying, 'cool, ok, you be liable, and we don't have any responsibility for it either'. As a group, we have the least amount of control over the advice that goes to the client."
She does not think that forcing advisers to work under their head group's FAP will lead to the "best client outcomes".
"I feel like this is not the intent of the legislative regime they are trying to deliver. They are trying to deliver good client outcomes, and I don't understand how this structure creates better outcomes. You want adviser businesses to be responsible for outcomes, and understanding their liability.
"Why is liability channelled to intermediary dealer groups? We are a link in the chain we provide a service to our members, not advice to clients. I struggle with the rationale," she added. "We are not being paid by the banks, but are being asked to assume the liability. It's an untenable position."
Newpark has raised doubts that head groups may not be legally entitled to become FAPs under the new regime. Regulation stipulates that FAPs must provide financial advice and have clients, Purdey says, meaning groups will not technically qualify. Newpark has sought legal advice on the issue.
"As we understand it under 431D we do not qualify as a FAP as we do not have clients to whom we provide advice."
The company has expressed its concerns to regulators. Nevertheless, Newpark says it is "FAP ready" but "do not want to go there until we know for sure".
In speaking out, Newpark wants lenders and other groups to discuss the issue further.
"We've always been proactive in terms of starting the conversation," Purdey says. "We do not have enough answers at this stage, and we want answers before we put our stake in the ground. We have to fight the good fight."