Advisers beware
Financial advisers face a tough year, says ING head of sales and marketing Wayne Becker – and he predicts the government may fast-track some of its planned new regulations in response to public pressure.
Wednesday, February 20th 2008, 6:00AM
by Rob Hosking
Advisers are having to adapt to a new disclosure regime, with more planned rules being outlined in two bills before Parliament, and are having to do so as they face financial market turbulence and agitated clients."It's going to be a watershed year for advisers," Becker told an ING road show gathering in Wellington last week.
"Some faces in this room won't be here in the second half of the year."
Many would exit the industry, he said.
He also warned the government's planned rollout of financial sector reform could come faster than expected.
The next phase begins with the new disclosure rules taking effect from 29 February – "and you should either have new disclosure documents completed or be well on the way to having them completed".
Quite a lot of the planned changes are not scheduled to come into effect until late 2009 or 2010.
"I think a lot of that stuff is now going to be fast tracked, particularly given the situation we are in and the reputation of this industry."
The Financial Advisers Bill, which includes proposals for the establishment of Approved Professional Bodies, had its first reading in Parliament yesterday.
Becker also predicts a rise in professional indemnity claims by financial advisers over the coming year.
"That always happens in volatile times, if you have a situation with clients where you believe it could well come down to a PI claim you need to be notifying your insurer now, and working towards managing that."
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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