Advisers can probably be forgiven for believing the ‘goalposts’ keep shifting, because they probably are, and there is a likely explanation for that, it’s called “prevalence-induced concept change”, a term coined by Harvard researcher Daniel Gilbert. Also called the ‘Blue Dot Effect’, this is a psychological tendency for humans to invent new risks, or expand existing minor issues into major ones, in the absence or reduction in the incidence of real threats. As real threats diminish, our brains tend to look for and redefine what threats are, making us see problems where there might be none, essentially making ‘mountains out of molehills’. Evolution has hard-wired us to expect threats regardless of whether there are any. As Daniel Gilbert says “Solving problems causes us to expand our definitions of them. When problems become rare, we count more things as problems”.

Advisers outline their latest expectations for FMA Advice firms are raising the bar for their expectations of the FMA, warning that having vague requirements and constantly increasing expectations is no longer going to be tolerated. Adviser told FMA’s Michael Hewes that Advisers expect the FMA to demonstrate their systems are working, not by having systems that work, but by having records that show they do. So far their records is one adviser was found in a monitoring visit that lost their registration. Hundreds of monitoring visits, lost of angst and censures and chest puffing but the record currently stands at one. For advisers, the message from the FMA is not to create more paperwork. It’s to make sure a client file clearly has the paperwork that shows why advice was given and how conflicts were managed, and whether the client understood the recommendation. Advisers make the paperwork to meet these requirements, and now we’re being criticised for creating the extra paperwork. We have noticed and adage when they go though and engage with entites: don’t talk to us about our management issues, we want to talk about yours. Mr Hewes says the FMA recognises the significant work advice firms have done since the new regime was introduced, including rebuilding advice processes, policies and professional standards. Advice firms say they appreciate the recognition of the significant time and cost and effort that went into all that, which means that the shifting of goalposts to ever increasing requirements shows the FMA has no idea how significant that work was. Advisers say that good advice is what we have always provided and that we know it starts with the client, and always did. Regulation did not change that, it just added a ton of paperwork and record keeping and costs that made it harder to spend quality time with those same clients. In fact advice firms strongly resent the insinuation that our advice process starts with a product before a client. FMA says it believes in advice. Advisers believed in advice before the FMA existed.

Rest in peace, Ross.