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Can you comply with the new Code?

Do you have anything to fear from the new draft Financial Advice Code? Can good insurance advice be given under the Code? Will you make it as a financial adviser under the new regime? Different questions with a common thread.

Monday, November 12th 2018, 7:00AM 1 Comment

by Russell Hutchinson

Russell Hutchinson

If you haven’t already done so, you should be checking out the new draft Financial Advice Code and making a submission on it (if you want) by the end of the week.

If you are one of the people – like me – who felt that the Code Working Group could have done with more insurance advice expertise on the team, you really owe it your contribution.

Angus Dale-Jones is talking at a number of events this week and has continued to encourage submissions on the Code.

Do you have anything to fear from the new Code?

For most good advisers, the answer is a clear “no”. There are no truly scary features of the new draft Code.

Unlike the earlier consultation document this is a clear and straightforward draft that anyone who is giving good advice can understand.

You can immediately begin to consider how you would meet the requirements of this Code.

If you have been operating as an AFA you will already be familiar with all the concepts. Most good RFAs will already be reasonably well-versed in these requirements.

Although you may not have anything to fear, you may well have things you need to change.

Especially for those RFAs without a strong, client-focused, advice process, there will be procedural changes you need to make. They may have systems impacts.

In addition, you may have new competence requirements.

Associated with changing how you fact-find, set goals, develop advice, and document advice, inevitably there will therefore be changes to what you say in the meeting with your client.

Some advisers, I know, spend considerable time crafting their language to ensure it is appropriate, accessible, and clear. The way you talk may need to be revised as well.

So a whole-of-process change is required – it is just as well you have some months pre-transition and the transition period in which to deal with those things.

To consider exactly what is required to change, you need to conduct a gap analysis – between your current processes and those required by the Code, and soon, regulations, and licence standards.

Which brings us to whether you will make it in the new regime. If you lack the resources to make the changes you need to, you may not.

Although I would encourage you to look around at the support you can access to help with the transition. Insurers, groups, consultants, and more are all there to help.

If you have a good income already, and good networks, you can be optimistic about the future.

Tags: Code regulation

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Comments from our readers

On 12 November 2018 at 10:39 am Tash said:
Agree with you Russell, I don't think it wil be hard at all. It will take some effort though and I think the hardest bit will be mental, our own reluctance to accept change.

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