by Susan Edmunds
When the Financial Services Legislation Amendment Bill becomes law, it will introduce a regime in which it will be adviser businesses that are licensed.
Scott Black, chief executive of Share, said his research indicated about half the groups in the market intended to become financial advice providers (FAPs) under the new law, providing a regulatory safe haven for all their advisers.
Others said they would offer it as an option only for a proportion of their advisers, encouraging the remainder to take up individual licenses.
Black said the emphasis had changed over time from an idea that licensing would be costly and complex for individual advisers, to an understanding that regulators would want to encourage small groups and sole advisers to apply for licenses.
Groups that provided a license for members would be required to have everyone operating in a consistent manner.
Black said that would help those groups that had strong systems and processes in place but would be more difficult for groups that were still in development.
He said, because Share advisers already operated under its brand and there were set standards applied, it would not be a big step for his organisation.
"Others might have to give it a bit more thought."
If groups did not offer a licence under which members could operate, whether they were still a compelling proposition would come down to the service they offered, he said.
Some would have to justify why they deserved to receive payment such as overrides, if advisers were individually licensed and dealing with many of their costs independently. "Advisers will need to think - ideally where is my business going to be in the next five years, what support do I need, am I looking for? I hope it will start discussions among advisers."
Kepa chief executive Jeff Page said he had been suggesting for the past four years that it was dealer groups that should be the licensed entity.
"It is my belief that the dealer groups should support their members with the changes in legislation, licensing, compliance and education, thus freeing them up to focus on what they are very good at doing with is building relationships with their clients and looking after their needs," he said.
"Dealer groups are better resourced to be able to do this for their members, or they should be, and this is where I believe we can add a huge amount of value to advisers."
Kepa has registered the name Fit4License. "With pending change around, licensing, education, compliance etc, Kepa has given all of our members the commitment, that we will be Fit4License and we will guarantee to of our members, that we will work with them, to also be Fit4License," Page said.
Kepa has appointed David Atkins to lead the delivery of the group's licensed model.
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