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Time running out for DIMS decision

With less than two months left to make a decision, a number of advisers are still unsure whether they will offer discretionary investment management services (DIMS) as of the second half of this year.

Wednesday, April 15th 2015, 6:00AM

by Susan Edmunds

Advisers who want to carry on offering DIMS under the new regulations have to take some action by the end of May.

Applications for a licence for class DIMS must be received by May 31. Those who want to offer personalised DIMS must file a new ABS by the same date.

Advisers who have been authorised to offer DIMS previously but no longer want to offer the service need to contact the FMA to cancel their authorisation.

Only a handful of class applications have so far been granted.

Robert Oddy, chairman of the Financial Adviser Association, said the number of people who would apply to offer personalised DIMS was small and the number accepted would be even smaller.

Some advisers could get a shock if they were denied, he said. “If you’ve got a practice developed to the stage where you expect you’re going to get this and you don’t it could be a shock to the system.”

He said people applying should consider how they would adapt if they were not able to continue to operate as they had been. “It’s a major change for a lot of people to go through.”

A survey of SiFA members showed very few were planning to go through the DIMS process, he said.  “A few had intended to apply for personalised DIMS and ceased their application. The application process itself is fairly trauma-invoking.”

Adviser Duncan Balmer said he had not yet decided whether to apply. He currently offers DIMS. “My question is whether it’s worth continuing to do DIMS, there are pros and cons from a business mechanics point of view.”

He said he could easily send documents to clients to sign and send back, to avoid being classed as offering a DIMS.  “On one hand it’s the more conventional way to operate but on the other there is now more requirement around the processes.”

Advisers who only rebalance portfolios back to a pre-agreed structure will not be considered to be performing a DIMS.

« Tell MBIE what you think of regulationQualification questions may cause concerns »

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