Associations tell Govt to hurry up on fix ups

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The Financial Advisers Association New Zealand (FAANZ) is concerned at the delay in allowing advisers dealing with category two products to voluntary opt in to becoming Authorised Financial Advisers (AFA).

Friday, August 20th 2010, 12:07AM

The Minister of Commerce, Simon Power indicated that he was happy for officials to consult industry and provide a suitable solution under the regulations of the Financial Advisers Act.

Due to late changes to the Financial Advisers Act, mortgage and insurance advisers were given assurances by government officials that the concept of having a ‘voluntary' option of becoming Authorised Financial Advisers made sense and would be formulated.  This has been supported by the inclusion of Category two products within the new draft code recently released.

FAANZ chairman Ron Flood says "Many advisers working with Category 2 products have continued to progress their education and system upgrades, investing millions of dollars preparing to opt into the Authorised Financial Advisers regime."

Flood said there are practical issues that would be addressed by allowing certainty around the ‘opt in' clause.  Advisers that want to be part of the AFA regime and who specialise in insurance and mortgages need to know that they are part of the AFA pathway. 

Many advisers are studying standard set E in the National Certificate for Financial Services (financial advice) covering insurance and mortgages. Yet this course work would not receive the recognition it deserves if the opt-in clause is not provided.

AFA status demands a higher level of education and compliance, both in business systems and adherence to the newly released draft code. While there is nothing wrong with advisers choosing to remain registered, insurance and mortgage advisers must have the choice to pursue that path.

"It's an option that can easily be built into the regulations and supported by Parliament," Flood said.

Most importantly, AFA status across all types of financial advice and products will contribute to greater consumer confidence as intended under the Financial Advisers Act.

"There is now a growing concern that the government seems to be slow to recognise all the time, money and effort that mortgage and insurance advisers have devoted towards the option of ‘opting in' to be Authorised Financial Advisers. Advisers expecting this pathway will be bitterly disappointed if told they can't do it."

He says mortgage and insurance advisers should have the same opportunity to be authorised at the same level available to financial planners and investment advisers in their industry sector.

FAANZ is a collective association made up of Institute of Financial Advisers (IFA), New Zealand Mortgage Brokers Association (NZMBA), Professional Advisers Association (PAA), SIFA and Life Brokers Association (LBA).  Together they represent around 2700 advisers.

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