The return asks 40 questions about advisers’ businesses over the year to June 30. It has to be filled out by the end of September.
The FMA said the information would help it in its risk-based approach to monitoring and surveillance of AFAs. “It will help us to prioritise our future monitoring activities and thematic surveillance work and to focus our resources effectively.”
It said it would allow best estimates where a question was asked that had not been asked before and an adviser had not collected the information over the year.
Advisers will be able to use the return to confirm their ABS is current.
Institute of Financial Advisers chief executive Fred Dodds said the FMA’s delay in making the return available to be filled in might raise eyebrows. Some had expected it soon after June 30.
“It is not now going to be ready until August 18 with a deadline of September 30. Many advisers would quite rightly say ‘FMA you are late so we are moving our response date to October 31’.”
A question that asks how many new clients an adviser personally provided financial adviser services to over the year in respect to category one products could cause confusion, he said. “Advisers will need to be reminded that the definition in the Act clauses 9 and 10 is about acquiring and disposing, including refraining from acquiring and disposing of a financial product. So an adviser will have to count, I would image, new business - acquiring, disposing of - cancellations, replacements - and then another number for the number of times they said ‘now don’t do that’ - refraining.”
A question about insurance products would be similar, he said. It asks: In the past 12 months, how many clients did you provide financial advice to about insurance policies?
Dodds said: “Most advisers would more readily answer how many sales but on the earlier definition of ‘recommendation or opinion in relation to acquiring or disposing’, this would mean the adviser would have to count all the prospects he/she asked to buy but got a no.”
He said the question about the total value of FUM could also be a challenge. “I think some advisers will again get confused around that definition and when they did it – was it in the last 12 months or is the FMA just after how much FUM I have? Product providers will get a lot of requests.”
| « AML definition criticised | IFA working on pro-bono offering » |
Special Offers
No comments yet
Sign In to add your comment
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved