CCCFA burden “hasn’t helped” the FAP licensing programme

A senior official at the Financial Markets Authority (FMA) has suggested that the FAP  licensing programme for advisers might have been easier without the presence of other  compliance hurdles such as the Credit Contracts and Consumer Finance Act (CCCFA).

FMA director of Market Engagement and acting Director of Regulations, John Botica, says implementation of the FAP regime is way behind schedule.

The law requiring full licensing was passed in 2019 and must be completed by next March.  

But only 30% of advisers have so far gained full licences and a further 20% are substantially on the way.

That leaves 50% still needing to get the process started, despite looming deadlines.

He told delegates at a conference organised by the Financial Services Council in Queenstown there would be no rollback of the March 15 deadline next year.

After that, the rule would be: “no licence, no advice.”  

“People in the industry must make a full and informed decision on what their future will  be,” he said.

Interviewed later, Botica suggested that many of the late comers were single-person practitioners.

“We are looking for every possible way to connect with them so that they have the appropriate information and can make an informed decision about what they want to do next.”

Anecdotal information suggests that many of the people who have not applied are preparing to leave the industry anyway, often in protest at regulation fatigue. 

Botica was then asked whether the sheer volume of onerous reforms, such as the CCCFA, might have played a part in advisers’ reluctance to comply with yet another regulatory burden.  .

“It certainly doesn’t help that there are a number of regulatory changes in the market at the moment,” he said.

“But I would not go as far as saying it has caused a greater problem.

“I can only be really concerned about the things that I can have some control over.

“I can’t control what’s happening in the regulatory environment.   I can only do my very best to support those who are going through it.”

Botica added he did not know how many non-applicants would comply with the FAP rules by the March deadline.

He did not have any targets or statistics in mind,but would press on anyway..  

“We will do everything we can to engage with advisers because ultimately I want the clients and customers to be looked after and I want to avoid any disruption in the market.”

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