Advisers risk going out of business

Advisers risk going out of business for a while with only 1,612 having passed Standard Set B out of an expected 5,000 as time runs out for the authorisation application deadline.

Friday, January 28th 2011, 7:26AM 12 Comments

by Jenha White

Securities Commission director of supervision Angus Dale-Jones says if there is a single message he can get out it is "go and sit Standard Set B".

Dale-Jones says advisers can apply for accreditation ahead of actually sitting the exam if they want to "get all of the administration out of the way".

But given the large workload expected, anyone who fails to apply by March 31 may not receive authorised financial adviser (AFA) status by the July 1 deadline, which means they will not be able to practice.

As of January 17, there were 4,333 candidates registered with ETITO and only 1,627 have passed Standard Set B which currently has a 77% pass rate.

Only 653 advisers have booked for Standard Set C assessment with a mere 66 advisers having completed the assessment.

ETITO calls on advisers yet to engage with the assessment process and to take action and submit portfolios at the earliest opportunity to avoid any last minute rush.

In the meanwhile the Securities Commission has been tracking forward with AFA accreditation, with the numbers having increased from 10 AFA's on December 1 to 48 AFAs on 21 January.

The numbers to be processed have also increased from 112 to 187.

Jenha is a TPL staff reporter. jenha@tarawera.co.nz

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Comments from our readers

On 28 January 2011 at 9:05 am Concerned said:
Also, do advisers realise they can't trade if they're not even registered by 1 April?
On 28 January 2011 at 9:40 am Bazza said:
Going out of Business? The number of advisers who must be AFA by July is unknown and is not directly related to the number of advisers who have enrolled with ETITO, because RFA advisers are also enrolled to complete their certificates. How many non-QFE category one advisers are in NZ? is anyones guess, but after the last few years maybe not as many as the regulators and training organisation thought there would be.
On 28 January 2011 at 9:44 am Fred or 'Anon' said:
4,333 candidate registered with ETITO, huh? GdReturns 24 Aug reports SecCom spent $5.2 mill on adviser regulation last year - or $1,200 per possible Advisor. The Regs allows start-up costs to be charged to AFA's.
Whatever happened to the "between 10,000 and 30,000 Advisors" that acting Commissioner of Advisers, Annabel Cotton promised?
On 28 January 2011 at 9:50 am richard said:
Should it be our problem that an adviser that completes all requirements by July 1st, is merely waiting for authorisation? Not our fault that processing is slow.
On 28 January 2011 at 12:53 pm Anonymous said:
One must only wonder why it takes three (3) months to have an application for authorisation to be processed. I'll say that again - 3 months ????
Based on current stats, one individual is being authorised per day of the month (or 1.5 per working day). Given that there are only 260 working days per year(not allowing for any leave at all) that means only 390 individuals can be authorised in any given year.
Noted above 112 applications are in and not complete, so there is only room for some 53 more to be authorised within the window left until 1st July.
I'm not sure what is going to happen to the other 1,000 individuals. On this basis there could be a 3-5 year wait!
On 28 January 2011 at 1:18 pm John said:
With the greatest of respect I don't think Angus Dale-Jones & the ETITO really seem to be listening to the message the industry is sending them. Clearly from the update to date of courses most advisers have now decided to be registered as opposed to been authorised. We can all debate the reasons for this but really as long as we are ALL registered by the 31st March does it really matter when those that decide to go down the AFA path actually start their study and exams to be eventually authorised one day? New people must be entering the industry all time so what about these guys if they want to be AFA??? Remember only those advisers selling investment products HAVE to be authorised by 1st July. Mortgage and insurance advisers can opt for AFA status at any point in the future if they want to. I mean geez some of us do actually have businesses to run and clients to look after! Regulation isn’t the ONLY thing that occupies our attention all day.
On 28 January 2011 at 2:07 pm Alastar said:
Well said again John. I agree with your comments 100% What a farce this has all become! From readers comments on here there are clearly not even enough resources in place to process those that are going for AFA status. What a joke!
On 28 January 2011 at 2:33 pm John said:
Just reading over Fred or Anon's comments about the $5.2M the SecCom spent on adviser regulation last year. My God! Can someone from the news media please do a story on how this $5.2M was actually spent to end up with where we are now?
On 3 February 2011 at 8:10 am Kevin said:
The real risk of going out of business will be doing much study and not enough selling. Most of us are not on a salary, or do they forget that?
On 3 February 2011 at 3:32 pm Giles Thorman said:
I was badgered by the Statistics office this morning, they had previously written to me twice and left three messages. They advised me there was a 'legal' requirement to comply with their survey; I reluctantly answered the irrelevant and inane questions about how much export business or export dollars I generated. I politely told the lady at the other end all I seemed to be doing currently was spending time and money from my business sitting exams, attending seminars and answering surveys all of which are Government initiatives that do not seem to be advancing additional business for anyone. I also fail to see how this process will protect the public when the Securities Commission is only now beginning to prosecute the real con men from the Finance Company debacle 3-5 years later and the Trustee companies failed to act until it was far too late. No doubt the Blue Chip ratbags will waltz through unscathed and never challenged. I have to admit to being disillusioned with this process, the seemingly moving goal posts and the lack of clear factual information rather than continual scare mongering. Maybe its my fault, I must have New Year blues!
On 3 February 2011 at 5:24 pm Alistair Holt said:
I would like to point out that the comments made by Alastar in this column and previous are not mine. I have been approached by a number of advisors regarding his comments and felt clarification was necessary. On the question of RFA or AFA in my view it is an individuals decison it is here and I am pleased to say I have completed the entire process A-E and encourage others to just step up and get on with it. It is never going to be easier than it is now. Yes it's time consuming and costly but what is wrong with upskilling and raising the bar guys?
On 7 February 2011 at 1:51 pm Anon said:
Well done Alistair! We need more people with ya mindset in this industry, too many people sitting fence and not getting on with it. Sure it's tough but really it can be done!
Commenting is closed

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