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Get basics right: Ballantyne (+ VIDEO)

Something as simple as producing a set of accounts to prove they have a financially viable business could be a significant challenge for some risk advisers, Partners Life chief executive Naomi Ballantyne says.

Wednesday, August 9th 2017, 2:30PM

The risk advice sector is set for significant upheaval as the law governing financial advice is overhauled. Advisers will have to be licensed in their own right, or act as representatives of a licensed provider.

Ballantyne said the regulator could be expected to look for a few key points when it was licensing financial advice businesses, including that they were financilaly viable.

"You need to have accounts that demonstrate that," she said.

"You need to be able to demonstrate that you have a business where you can take a set of accounts to show someone and say, 'Look, here’s my profit and loss over the last x amount of years'. That’s actually going to be quite an interesting challenge."

She said it would be important that the regulator could see the business was a robust going concern. Advisers would also need to show their systems and processes.

"A lot of people think they have a system or process; what they mean is that they do something similar all the time.they don’t have is, 'If someone was to come into my business, I could demonstrate to them a document that says that every time I find a client I do this. This is how I use the system and processes. This is how I deliver my advice.' Even if there wasn’t regulation, that’s the thing you have to sell."

It is not yet known what qualification and competence requirements will be imposed on advisers who are currently RFAs but Ballantyne said no qualification would be wasted.

"Learning is the really important part. Even if you don’t know in the end what the qualification is going to be, doing some study now that is in line with the industry you’re in won’t be wasted, and might help with being able to demonstrate you’re a fit and proper person."

She said it seemed likely that aggregator groups would have to deliver more services.

"I guess they have a choice: they can become licensed entities, in which case they’re going to have to be selective about the people... because you take liability on board for the people that you have under your licence. You’ve got to be comfortable that liability is not going to swamp you, or that you can demonstrate the wherewithal to fund the liability in the event that there’s an issue. If any of them decide to become licensed entities, they’ll have to get smaller before they get bigger."

She said companies such as Partners Life had an interest in maintaining a robust advice distribution network and could have a role in helping advisers navigate the changes ahead.

"If the industry is delivering the best answer for the client, that’s good for the industry and we succeed. That’s the reason for me being so focused on independent advisers. We need a robust independent advice channel going forward. We will support people who are building the infrastructure to enable that to happen."

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To read the full transcript, click here

Tags: financial advisers GRTV Naomi Ballantyne Partners Life qualifications regulation RFA risk

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