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Advisers 'struggle to balance regulator and client'

New Zealand is getting up to speed with international financial advice regulation requirements, but non-AFA advisers may struggle to meet their new requirements when the Financial Services Legislation Amendment Bill takes effect, says the owner of a new compliance business.

Tuesday, July 31st 2018, 6:00AM

by Susan Edmunds

Steven Burgess is director of Compliance Refinery.

Originally from Canada, he worked at the Financial Markets Authority and AMP before setting up in business on his own.

He deals with advice businesses of all sizes.

Advisers had significant hurdles incorporating compliance processes into their business that did not get in the way of their client focus, he said.

A lot of advisers spent a lot of their time making sure the regulators were happy, in ways that did not provide a clear benefit to their clients, he said.

Advice businesses often needed help to move to a system that would meet client needs as well as regulatory requirements.

"They might spend three or four hours on a statement of advice then the clients don't even read it... at a basic level it's about starting to help them transition to where they meet regulator and client needs.

"What are the needs of the client, then what can they do for the regulator, then let's do something that matters to the customer. If less time is spent writing things that don't matter to clients that's more time they can spend with clients. It's a relationship business."

Burgess said it seemed New Zealand took its lead on regulation from Australia.  But while the Australians had moved to tighter regulator some time ago, New Zealand was only moving now.

The FMA had been promising to move on from the education focus it had during its start-up phase for years but had not yet been able to properly do that, Burgess said.

He said while a lot of AFAs had gone through the process of adapting to regulation since the implementation of the Financial Advisers Act, a group three or four times their number would be captured by the new rules and, for some, that could be a hurdle that it could take some time to get to grips with.

Tags: financial advisers regulation

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