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Two advisers get personalised DIMS nod

Two advisers have been authorised to provide personalised discretionary investment management services.

Monday, August 10th 2015, 6:00AM 2 Comments

by Susan Edmunds

Under the Financial Markets Conduct Act, all providers of class DIMS must be licensed. But those who provide a personalised service under the Financial Advisers Act can continue to do so with approval from the Financial Markets Authority. They had to submit an updated ABS by May 31 and have until December 1 to update their client documentation.

It had been suggested that few AFAs would be up to the standard required.

The FMA confirmed last week that it had approved two applications. One was from Christchurch adviser Alistair Bean. 

Both are members of the Institute of Financial Advisers.

Bean said he was absolutely thrilled to have been given the nod by the FMA.  “So many people tried to talk me out of it.”

It had taken more than two years to get to the point of approval, he said, including many discussions and meetings and discussions about how it should be approached. “There had been many sleepless nights but then when I sat down to do it, it took less than three hours.”

A one-and-a-half hour phone call with the FMA followed, and a wait of six weeks while the FMA reviewed his business and made further calls.

Their main interest had been in determining what Bean’s definition of personalised DIMS was, he said. “I told them I run a relationship business. My clients as me to make investment planning decisions and recommendations on their behalf so they don’t have to. Personalised DIMS was the best option to put clients’ needs and interests first.”

Bean said he would not have been able to continue with his business without the authorisation to provide personalised DIMS. He uses a OneAnswer wrap platform but not model portfolios.  “I could not do what I do without being authorised to make decisions on clients’ behalf. I survey my clients every year and they tell me straight out the reason we employee you is so we don’t have to make the decisions. Otherwise why would we use a financial adviser?”

About 85% of his client portfolio is direct investments.

Bean said he deliberately ran a business with small numbers of clients – he does not want to get to more than 100.  That was key to being able to offer personalised DIMS, he said. “If you had 10-00 clients you haven’t got a lot of choice [but to be licensed for class DIMS].”

Bean left ANZ and started his own firm in 2013.

He said he expected a higher level of monitoring now than he would have received as a non-DIMS adviser.

He would recommend the process to other advisers, he said. “Now I’ve done it and know what I’m doing at the end of the day it was quite seamless.”

Tags: DIMS FMA

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Comments from our readers

On 10 August 2015 at 10:53 am vivecca said:
Well done Alistair
i'm really pleased for you and your clients
Keep up the good work
V
On 10 August 2015 at 11:50 am fiona judd said:
As a point of clarification I applied and was successful in getting a class DIMS licence.

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