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Small providers offered DIMS wing

A wealth management firm is offering to partner with advisers who would like to continue to provide DIMS but do not want the hassle of a class licence.

Thursday, March 19th 2015, 6:00AM

by Susan Edmunds

Newton Ross has placed an advertisement in the March issue of ASSET magazine, saying it would consider working with advisers who want to provide investment and DIMS services.

All advisers who offer a class DIMS service must apply for a licence by the middle of this year. Only those who offer a bespoke DIMS service can continue to do so under the Financial Advisers Act. The FMA does not expect many advisers to qualify to provide a personalised service.

But the DIMS licensing requirements have been described as too onerous for small advice businesses.

Newton Ross founder Wayne Ross said the firm was looking for advisers who wanted to continue to manage their client relationships but did not want to go through the process of applying for a licence under the Financial Markets Conduct Act.

Ross said it would be a way for advisers to operate under the Newton Ross licence, which the company is in the process of applying for. A number of individual advisers are allowed to operate under a company’s licence.

Ross said it was an alternative for advisers wondering what to do in the face of licensing requirements. “Lots of people will think it’s too hard and ask clients to sign everything off or will throw their hats in with a larger institution and become one of their advisers under their brand. But there are people who do have a good business, good relationships with clients and don’t want to join someone else but want the structure to be able to continue.”

Costs would not be substantial, Ross said. “At the moment they pay a custodian for their service, it’s no different.”

He said clients would already pay for an administrative service.

The DIMS arrangement would be an extension of that.

“With a DIMS licence you have the reporting, monitoring and a few extra things the FMA requires all tied up in the administration going forward. At the moment advisers are doing some of those things themselves and the client is paying for them down. Say the client is charged 1% in total, and that’s half administration, half advice. There’s no reason they’ll need to pay more but it might just be split differently if the adviser isn’t doing the administration any more but is outsourcing it,” he said.

« How small is a small DIMS business?IFA working on pro-bono offering »

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