About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Friday, December 6th, 6:43PM
rss
Latest Headlines

Concern adviser numbers will fall

There are concerns further regulatory change could drive more advisers from the industry.

Tuesday, January 19th 2016, 6:00AM 3 Comments

by Susan Edmunds

The Financial Markets Authority is consulting on its options paper for the Financial Advisers Act review and is holding workshops early next month with stakeholders.

One of the proposals that has caused the most early consternation relates to entity licensing - regulating advice businesses rather than the individual advisers themselves.

Wayne Smith, chief executive of the TripleA Advisers Association, said it could be hard on some and might force some practitioners out of the industry.

"About 70% of our members are sole operators with a further 23% in adviser firms of between two and 10 advisers. Around 60% are AFAs with two-thirds over 50 years of age. Entity licensing will create quite significant costs that will likely advantage large organisations such as banks etc over small adviser firms," he said.

"The result may well be a solid reduction of genuinely independent advisers in the market place over the coming years and that wouldn't be in the best interest of the consumer."

Smith said the demographic make-up of the industry was such that many advisers were nearing retirement.

Depending on what the regulatory review decided, some could be forced out, he said. "I'm not sure there's much of a pipeline of recruitment into the industry like there was, the industry is on watch anyway from a TripleA perspective. We'll have to watch and see what the Ministry of Business, Innovation and Employment does."

He said that, 10 years ago, many firms brought younger people in to the industry and provided training. "I'm not sure that's happening to the same extent."

He said there could be an opportunity for professional bodies and training organisations to provide training or financial advisers. It would help to have a clearer career path for people interested in the industry, he said.

Tags: financial advisers Financial Advisers Act MoBIE

« Risks indicators an education toolLVR restrictions to be reviewed »

Special Offers

Comments from our readers

On 19 January 2016 at 12:43 pm The Oracle said:
Strange comments, I know Newpark recruited over 100 brand new advisers into the industry in 2015 and runs 8 new adviser training camps p.a.” I am also aware PartnersLife has been very busy all year with its new adviser training courses.Dealer groups are recruiting, training and developing advisers and I’m sure dealer groups will support advisers in the new regulatory world when it comes.
On 19 January 2016 at 2:44 pm gavin austin adviser business compliance said:
Wayne may have a good point. There has already been some reduction in AFA numbers and mostly it would be from the small one person or two person business sections. The FMA publishes an AFA list periodically and some simple analysis shows that from March 2015 to November 2015 AFA numbers fell from 2004 to 1853 – 151 less. What we don’t know is what made them stop practicing. Was it the FMC Act and it’s messy DIMS outcome? What we can see is that the number of QFE or Corporate employed AFAs has increased marginally and the number of individual AFAs in practice by themselves or in smaller groups has diminished by about 190. Will the results of the review of the FAA have a similar affect? Who knows? We do know that any additional impost of time and money won’t help with the retention of our aging AFA population. The challenge for the industry (ex QFEs and Corporate entities) is how to put in place a successful business succession plan that doesn’t involve simply selling the clients to the highest bidder. If this is your succession plan then what will happen is that the QFEs and Corporates with the big cheque books will win again. If you want to sell your business to someone like yourself who will care for your clients as you do then a different approach is going to be the challenge. Those businesses with a succession plan, sound simple compliant processes and a strong client Wayne may have a good point. There has already been some reduction in AFA numbers and mostly it would be from the small one person or two person business sections. The FMA publishes an AFA list periodically and some simple analysis shows that from March 2015 to November 2015 AFA numbers fell from 2004 to 1853 – 151 less. What we don’t know is what made them stop practicing. Was it the FMC Act and it’s messy DIMS outcome? What we can see is that the number of QFE or Corporate employed AFAs has increased marginally and the number of individual AFAs in practice by themselves or in smaller groups has diminished by about 190. Will the results of the review of the FAA have a similar affect? Who knows? We do know that any additional impost of time and money won’t help with the retention of our aging AFA population. The challenge for the industry (ex QFEs and Corporate entities) is how to put in place a successful business succession plan that doesn’t involve simply selling the clients to the highest bidder. If this is your succession plan then what will happen is that the QFEs and Corporates with the big cheque books will win again. If you want to sell your business to someone like yourself who will care for your clients as you do then a different approach is going to be the challenge. Those businesses with a succession plan, sound simple compliant processes and a strong client centric attitude combined with a simple “How we Add Value” statement will be the winners. 2016 already looks to be an interesting and challenging year for all stakeholders. attitude combined with a simple “How we Add Value” statement will be the winners. 2016 already looks to be an interesting and challenging year for all stakeholders.
On 20 January 2016 at 2:03 pm Pragmatic said:
Popping a cat amongst the pigeons with Gavin’s commentary:

1. What if large financial institutions (traditional buyers and recruiters) determine that wealth management is not for them? Perhaps it stuffs their balance sheets, taking funds from higher geared alternatives? Perhaps it’s easier simply to flog their own products
2. What if the consumer objects to having their relationship sold – at least without their consent?
3. What if the smaller practices (aka independent) are the only ones able to provide non-aligned solutions?
I suspect that at least one of these will occur, in the face of rising Regulatory pressures and consumer sophistication.

BTW: The majority of the remaining AFAs (1,853 according to Gavin) appear to be doing just right

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 ▲4.05 4.49
ANZ Special - 3.55 ▲3.55 3.99
ASB Bank 5.20 3.89 4.05 4.39
ASB Bank Special - 3.39 3.55 3.89
BNZ - Classic - 3.49 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide ▼5.65 ▼4.75 ▼4.75 -
Credit Union North 6.45 - - -
Credit Union South ▼5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.54 3.54 3.69
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 4.14 4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.39 3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - ▼3.39 3.45 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.39 3.45 3.99
Median 5.34 4.04 4.09 4.39

Last updated: 4 December 2019 9:11am

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com