Advisers not dropping out, Financial Advice NZ says

Financial Advice NZ says most advisers plan to remain in the sector under the new licensing regime – and most will take their own licence.

Thursday, October 17th 2019, 6:52AM 1 Comment

A survey conducted by the association this week showed 80% of respondents had already determined how they would give financial advice under the new licensing regime.

Of those, 48% said their own firm was becoming a licensed financial advice provider (FAP), 21% said they intended to join a large licensed FAP – either a current aggregator or a dealer group – and 12% said their employer was becoming licensed.

Just 12% said they had yet to make up their mind about what route to take, while 7% said they hadn’t thought about it or didn’t understand enough yet.

Of total respondents, 90% said they have been in the financial advice sector for more than 10 years. Some 60% of those have been in the sector for more than 20 years, 30% between 10 and 20 years, 6% between five and 10 years, and 4% less than five years.

Financial Advice NZ chief executive Katrina Shanks said she was encouraged by the survey results.

“These are great numbers because they show a lot of very experienced financial advisers have already decided what they’ll be doing come June next year. They know who their FAP is going to be.

“That’s a good thing from both the sector’s and public’s point of view because it means the new regime is not scaring off advisers, particularly the most experienced ones.

“We know quality advice can be transformational to New Zealanders’ lives, and the retention of our most experienced advisers will help drive increasing levels of public trust, as well as hopefully encouraging advisers who haven’t made up their minds, or who don’t understand the new regime, to check out their options.”

If advisers have not applied for a FAP transitional licence before June, they will have to either wait until they gain a full licence, or provide advice under another FAP’s licence.

“The new regime, running as it will alongside the new code of conduct, is a positive move forward because it will enable those seeking advice to more easily understand a professional adviser’s expertise and to know they are in capable hands that are subject to good regulation.”

She said Financial Advice NZ encouraged advisers who had still to decide about their future to check out the options on the FMA website, or call the Financial Advice NZ help desk.

Tags: compliance FANZ FAP Financial Advice New Zealand financial advisers FMA Katrina Shanks licensing regulation

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Comments from our readers

On 17 October 2019 at 2:09 pm MPT Heretic said:
The FMA is budgeting on 2240 FAPs being licenced. Which is pretty much all the existing AFAs and a few large instos. Is going to be interesting if they end up having to licence and monitor twice that many which is what the numbers above suggest.

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