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From today everyone offering financial advise is on a level playing field and is under the watchful eye of the Financial Markets Authority.
While the final numbers are yet to be released there are around 2,500 financial advisers providers (FAPs), 8,800 financial advisers registered on the Financial Services Providers Register (FSPR) and12,000 nominated representatives. These are essentially staff within class three FAPs such as banks and insurance companies.
The numbers are about six percent lower than those who gained transitional licences two years ago.
Despite having four years to get ready for this day dealer groups are reporting that they still have a number of advisers who have yet to complete all the requirements including level five qualifications and competency standards.
One training provider is reported to have 400 people in the pipeline waiting to complete their papers.
It is now illegal for these advisers to give advice.
The FMA is not expected to go on a witch hunt looking for unqualified advisers giving advice.
While there has been a lot of hand-wringing about the new regime, it is positive that all advisers are now on a level playing field.
What will be interesting to watch is how the FMA regulates the sector. For the FMA understanding how financial advisers work is still a work in progress and it will be relying heavily on the mandatory regulatory returns, with the first one due in late next year.
For some the bar of level five qualifications was too high, and they left. For those who opted into the regime don't be surprised if over the years this bar is lifted even higher.
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And those who do not meet the competency requirements will receive a call and/or a letter soon if they have not already.
That letter will ref. the code, the Act, the "safe harbour" expiring today, and it will say :
"You have indicated that you are unlikely to meet the competency requirements by 16 March 2023, as such you must stop providing regulated financial advice until such time as you do."