About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Monday, March 25th, 11:35PM
rss
Latest Headlines

2018, more time will tell

It’s been an interesting year and one that suggests there has been a level of change we’ve not seen in our industry for some time.

Tuesday, January 1st 2019, 8:51AM

by Jon-Paul Hale

Lots of debate, and certainly lots of signaled change. Marred by a few that still think operating in the ’70s is still an option.

One thing is very clear to me; our regulator is quite interested in things that go bump and get swept under the rug. With a couple of notable prosecutions announced this week and the copy/paste discussion from a few weeks ago ending the year on a compliance note.

Drawing a Brexit analogy is probably a step too far on the proposed changes, at the same time things have slipped and we’re still not quite there with clarity and confirmation on the changes before we wrap up. This my title, more time will tell.

The upside, the FMA have indicated what the licensing is likely to cost, and the subsequent conversation around that has been relatively quiet. An indication that it’s been well received so far.

How well? Let’s see where the consultation docs get to.

Personally, on the face value, it’s about 1/3 - 1/5 of what I was anticipating, though as was pointed out this it the transitional licensing costs, and that may change by the time we get to full licensing. Again more time will tell.

The hourly rate aspect sounds interesting; I can see this causing a few headaches, both an indication that the time required against the mandate to only charge for costs may be something the FMA may need to still have clarity on.

Though too, the adviser who thinks he can vs actually licensing may be exposed to some unexpected costs. More time will tell.

We have a draft code, which has had a lot of conversation and debate — comments on guidance and the examples, with the addition of education and cross-crediting of qualifications. Just as many answers as there are new questions seem to come from the draft and subsequent discussion.

A couple of things that seem at odds that the wider industry still needs clarity and information on.

Education:

With the plethora of Level 5 qualifications gained this year, it’s pleasing to see advisers taking the initiative to get things moving. However, I wouldn't be putting the studying away for 2019/20 just yet.

We know Level 5 is the intended minimum, the code states Financial Advice strand. Additionally, under the competency piece, we can be sure that the FMA will want to see Financial Advisers holding their specific competency strand for the advice they give too.

We haven't had the CWG clarify their statement in the code to indicate anything different. I have said on more than a few occasions that the CWG has indicated elsewhere in public discussions that the intention is to have advisers qualified in their particular specialty.

Given that the present level 5 qualification financial advice strand doesn't cover the specific product strands and the product strands don't include the financial advice strand. I think we have a gap that may not be as clear to most, that will need to be addressed.

We know that the present revision to the level 5 qualification is expected/intended to bring the financial advice stand into the core of level 5 which is referenced in the discussion for the code.

It may be that we are looking at level 5 core as the base requirement for general advice, something a nominated rep might pursue initially, but isn't required to have, before looking to specialise into a particular strand. Also too, this may be the base requirement for the FAP, plus whatever they license for.

Also, then the financial adviser themselves then need to have the new core with financial advice, plus their specialty strand.

So those celebrating their achievement of the Level 5 Financial Advice Strand, congratulations! At the same time, you need to think about completing your specific advice strand(s) for your product specialty(s).

For those who have done Level 5 Life and Health Strand, or other specialty strands, also congratulations! At the same time, we may have to go back and do the Financial Advice piece too.

Because this is still unclear with what we know, those with a specialty strand don't run out just yet, as there is both confirmation on this expected with the final code, and we also hope to see something on what ’cross-crediting’ from other qualifications might look like as many life advisers do have other formal qualifications. It is an industry that is often a second career and not an initial calling.

Though don't expect clarity on cross-crediting from the CWG or the FMA, they don't decide that NZQA or someone in that area will be the go-to on this stuff.

For the financial advice strand holders, expect to have to do the relevant specialty(s) if you want to register as an FA under a FAP, or register your own FAP. Again we have time, though this one is probably more likely a requirement than not, and is less likely to have other formal qualifications that may cross credit.

Again, on this, time will tell.

And then we have FSLAB. It was expected to pass before Christmas, and it's been languishing on the list above 20 for quite some time. The latest news on this, maybe February 2019.

Without FSLAB being enacted, the draft code, while being able to be pushed through, won’t work with the existing FAA, as it is designed to work with FSLAB.

As to the review of disclosure, pass, it's been very quiet to silent on that front. Nothing to report and this may be a real scramble at the starting line.

So we have a situation where we may have everything lined up, but we’re still waiting for the starters' gun. Another time will tell situation.

And I have a sense of deja vu developing, with the last review of financial adviser regulations being pushed around by stormy markets that resulted in it being watered down. We’re hearing more market commentary about market risks developing and comments suggesting ’it will’ turn up in 2019.

Again time will tell, though we do know governments dealing with crises tend to slow down on progressive legislation to focus more on the crisis at hand.

Here's hoping we won’t see any massive market changes and anything that does arrive is a blip in the scheme of things, so we can get down to the business of bedding this in and getting on with helping clients.

Whichever way it goes, enjoy your break and come back rested, as next year is going to be another very busy year.

Have a happy and safe Christmas & New Year!

Tags: Jon-Paul Hale

« So what are you going to do differently?How organised are you? »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.55 ▼4.49 4.99
ANZ Special - 4.05 ▼3.99 4.49
ASB Bank 5.80 4.45 ▼4.49 4.89
ASB Bank Special - 4.05 ▼3.99 4.49
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.05 ▼3.99 4.49
BNZ - Std, FlyBuys 5.90 4.69 ▼4.59 4.99
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.20 5.25 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.70 4.85 -
Housing NZ Corp 5.80 4.69 4.79 4.79
HSBC Premier 5.89 3.99 3.99 4.39
HSBC Premier LVR > 80% - - - -
HSBC Special - 3.69 3.95 3.95
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.80 4.94 5.24
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.05 3.99 4.49
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special - - - -
SBS Bank 5.89 4.85 5.05 5.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.05 4.29 4.49
Sovereign 5.90 4.45 ▼4.49 4.89
Sovereign Special - 4.05 ▼3.99 4.49
The Co-operative Bank - Owner Occ 5.75 4.10 4.29 4.49
The Co-operative Bank - Standard 5.75 4.00 4.79 4.99
TSB Bank 5.80 4.55 4.69 4.99
TSB Special - 4.05 4.19 4.49
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.69 4.79 5.19
Westpac - Offset 5.95 - - -
Westpac Special - 4.05 ▼3.99 4.59
Median 5.89 4.50 4.54 4.84

Last updated: 26 March 2019 5:00am

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