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Pitch to tie advisers to QFEs inevitable say IFA, SIFA

Prospective qualifying financial entities (QFEs) are laying the groundwork to pitch themselves to advisers as the looming regulation deadlines draw nearer in what was always going to be an inevitable result of the legislation.

Tuesday, February 16th 2010, 5:32AM 3 Comments

by Paul McBeth

AXA New Zealand and fund manager ING New Zealand put the pitch out to advisers in their respective roadshows last week as the deadline of looming regulation draws nearer in a move that some of the associations have been waiting for.

"Since the definition for QFEs was changed to include agents we always thought that would happen," said Lyn McMorran, president of the Institute of Financial Advisers. "If tying advisers will have people authorised there will be a market for it."

Murray Weatherston, chairman of the Society of Independent Financial Advisers, agrees saying the QFE regulations were always going to see a push for linking advisers to product providers.

"They're clearly going to try and increase their control and distribution," Weatherston said.

The QFE regulations were poorly understood by many advisers, who mistakenly believe that being a part of a QFE will allow them to advise on all products, Weatherston said, and not enough people realise that if they join a QFE they will only be able to sell promoted products.

In AXA's pitch, chief executive Ralph Stewart let advisers know that if they sign up to join his company's scheme, not only will they be able to sell AXA products, but there will also be a list of approved products by their competitors, which will be chosen by a committee which will include an independent member from the AXA Adviser Association. Stewart said the company wants to be able to maintain relationships with advisers who do not sign up to their scheme.

ING's managing director of funds management Paul Butler said they will use their QFE scheme to build relationships with advisers, and said he expects people to sign up to several schemes that will allow them to sell multiple companies' products, while head of retail distribution Trish Edmonds let advisers know about a new support system to help them through the regulatory changes.

 

Paul is a staff writer for Good Returns based in Wellington.

Tags: regulation

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Comments from our readers

On 16 February 2010 at 10:30 am Murray Weatherston said:
I don't want to be picky but I am a little misquoted in the above where it says in 3rd last paragraph "only be able to sell promoted products". I said only be able to sell products issued or promoted by their QFE.

Either I am confused or else everyone else is confused about what a QFE authorised adviser will be able to advise on without being individually authorised.

My understanding is that a QFE will provide cover for an adviser when they advise on products issued or promoted in the Securities legislation sense. The fact that AXA will have non-AXA issued products on its adviser list does not mean that AXA is the promoter in the securities legislation sense.

Ralph Stewart seems to me to be suggesting that a member of AXAs QFE will not need individual authorisation to sell AXA endorsed products that are not issued by or promoted by AXA. I think that is plain wrong.

Paul Butler seems to be indicating that advisers will be able to be signed up under multiple QFEs. We asked for clarification of that in a submission to the Code Committee but we have not had a response.

I think the regulators have a duty to clarify such issues as they arise rather than have 33 different interpretations floating around. (But I am not prepared to hold my breath...)
On 19 February 2010 at 4:01 pm dgg said:
and don't overlook the fact that a QFE adviser CAN NOT provide a financial planning service - this is only permissable for AFA's.
On 19 February 2010 at 5:03 pm BGW said:
Murray, I agree with you completely on all fronts. This issue also affects stockbrokers and futures advisors who, of course, do not advise on corporate issued or promoted products so will all have to be individually authorised - however I don't think others in the industry agree with me on this - again, clarification would be appreciated!
Commenting is closed

 

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