Advisers get extension, but some don't want one

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Advisers in the Canterbury region have been granted an extension to comply with the new financial adviser regime, but not members of QFEs.

Wednesday, March 30th 2011, 7:19AM 1 Comment

by Benn Bathgate

Advisers will have a further three months to seek registration and authorisation under the new financial adviser legislation, Commerce Minister Simon Power says.

The extension has been welcomed by IFA chief executive Peter Lee, however some advisers say it isn't really needed.

"I think it's absolutely fantastic," Lee says. "I'd specifically written to Simon Power to say we'd really like to have a three month extension for the Canterbury advisers and that's exactly what's been given."

"There's a lot of advisers down there that are hurting and the last thing they really wanted was to comply with rules so we think it's brilliant," he said.

Argent Financial Services principal Alan McNaughton also welcomed the extension, however he believes those advisers that are able to stay on course for authorisation should do so, especially given the lack of new business.

"It's good, but at the end of the day what's the point? We're not really doing much work. There's not a lot of selling going on so I've suggested to our guys that although there's been the extension it's going to be easier to carry on doing things now," he said.

 "All you're doing is putting off something that's got to be done anyway, and if you put it off now, it's going to be harder to get interested again in another six weeks."

McNaughton's stance is also shared by Myles Wealth Management's Craig Myles.

"I was always of the view that those who were already in the process of getting qualified who could continue on in that pathway in a timely manner would want to do so. But it did allow some consideration for those who needed more time."

Power said the new regulations, under the Canterbury Earthquake Response and Recovery Act, mean affected advisers will have until July 1 to ensure they are on the Register of Financial Service Providers, and until October 1 to finalise their authorisation and meet obligations under the Financial Advisers Act.

However, the extension does not apply to nominated representatives of QFEs.

Lee speculated this was for two reasons; he doubted any QFEs are run from the region, and he said it would be hard to exempt staff in just one city from a QFE.

"It's not like the other regimes in terms of AFAs or RFAs which is done on a person by person basis and you can distinguish from one city to another. QFEs are in essence nationwide and I don't think it'd be possible from an administration perspective to provide relief for them."

Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz

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