Advisers welcome new regime

Today marks the first day of the new licensing regime under the Financial Services Legislation Amendment Act. And a new era for advisers across New Zealand.

Brokers will need to have their own transitional FAP licence by now, or work under a group FAP, to continue operating.

Those with transitional licences will have two years to complete their competence, knowledge and skills standards under the new Code of Professional Conduct. 

Anyone without a transitional licence will need to apply for a full licence.

Katrina Shanks of Financial Advice New Zealand said the new regime would "add an additional level of trust in financial advice for the public".

"Commerce Minister David Clark put it in a nutshell when he said the new regime 'will give consumers greater confidence to seek advice that will help with their financial goals, providing them with greater trust in the quality of that advice'," Shanks added.

Glen McLeod of Edge Mortgages told TMM Online it would be "business as usual" for him and other good brokers, "with a couple of extra add-ons to what we're having to send out to the client".

"I guess that when you are already recording all aspects of interaction with clients and following the process that has been best practice for many years it really doesn’t feel that different," he added.

He said advisers would begin to feel the difference of the new regime "once the auditing kicks in", "again, not really a problem, but just another step in the process".

McLeod is positive that the new licensing regime will further professionalise the sector.

"I personally think it’s a great thing for the industry, and anything that can further provide credibility to our profession [is for] the better," he added.

Squirrel's John Bolton said most adviser businesses had spent the past few weeks sorting out their disclosure statements and welcome documents.

Squirrel has "fine tuned" its disclosure documents into a new welcome pack, as it attempt to embed the new regime into the customer experience.

Bolton added firms would evolve their existing processes to fit and comply with the new regime.

While Bolton believes the regulation is good for the industry, he hopes regulators will be tough with bad actors and those not complying.

"The regulation is only as good as how it deals with people who aren't up to the standards," he said. "It's all good putting the customers first, but how are regulators going to deal with advisers who don't?"