Stewart, who runs adviser support group Finzo, reckons many advisers are sitting back on licensing because of continued uncertainty.
In particular he is wanting to see guidance notes from the Financial Markets Authority on what Financial Advice Providers (FAPs) need to do under the new laws.
“I think quite a few people are in a period of hiatus, ostrich-like, just waiting for these guidance notes.
“Hopefully they will arrive in February/March next year, and then I think firms will start to really ramp up their due diligence.”
While there has been a steady trickle of firms entering the transitional licensing framework, which started last week, many will sit back and wait until the last minute.
He describes it as being like the lead up to Y2K.
Stewart also cautions other groups about building their own CRMs saying it takes a lot of time and money to get it right.
When it comes to thorny issue of how much advisers will have to pay to belong to a FAP, Stewart is a little cautious.
One mortgage broker dealer group head suggested the annual cost would be around $21,000.
Stewart was reluctant to put a number on it, and noted that some forms of advice are easier and less risky than others.
Finzo looks after advisers doing pensions, KiwiSaver, wealth management and risk management, both personal and business. “It's a more complex animal,” he says.
Advisers also need to ask groups if the costs are bundled up or there are lots of individual costs like professional indemnity, auditing, CRMs etc.
Finzo has a couple of different offerings, he says. “One of them will be people utilise our FAP and become an authorised body.
“But the other is that we support firms to achieve their FAP. So in other words, they're using our building blocks, our compliance structures, our CRM engine platform, everything integrates through. That's why our little tagline is "integrated financial solutions" because we want things to work together.”
He says Finzo offers advisers “Independence. Family values. We’re a family owned firm, non-aligned. We're not for sale. A nice young team.”
Stewart says the FMA has taken a softly, softly approach so far but probably needs to toughen up its message: “The regulator needs to be, I think, stronger on what the responsibilities with FAP are.”
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