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The new regime starts on March 15, at which point everyone giving personalised financial advice needs to have a transitional licence, or to be working for an entity that has a licence.
To apply, would-be financial advice providers need to register on the FSPR with the relevant financial advice service at least 24 hours before they started their licence application.
Financial Markets Authority director of market engagement John Botica said there were about 400 entities that had registered for the FAP service with the FSPR but had not yet gone on to the next step.
He told an FSC webinar that he spoke to one adviser who thought that his transitional licence had been granted but he had only received notice that his registration with the Companies Office had been successful.
He said those 400 entities should check back through their processes to see where they were at.
Otherwise they could be in for a nasty surprise next March, he said. “I don’t think you’re going to like the experience if we are rapping on your door [for] operating without a licence.”
He said applications had been received covering more than 70% of the registered and authorised financial advisers in the market.
All up, he said about 16,000 advisers were represented and the FMA were “really quite enthusiastic about what I would call personal touch financial advice continuing to dominate financial advice of the future”.
Warnings of the end of small businesses seemed unfounded, he said. Just under 50% of all licences so far were single adviser firms.
“That tells us that small firms are not fading away as was predicted by some commentators when the regimes were first introduced.”
He said New Zealanders needed financial advisers’ service more than ever. “Keep learning, stay ahead of the curve … through change comes opportunity and there are many opportunities for all of us ahead.”
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Also I alluded to in my previous article, we’re not getting the quality of data on these numbers to be accurate, and I freely admit I take a worst-case approach to what we have going on.
Mainly due to my past experience where advisers by and large leave it to the last minute or past the deadline.
Knowing that 400 are stuck in the middle of the process is also positive that people are moving which is good to see.
But that doesn’t take away from the fact that we still don’t know what’s happening with a significant portion of the industry that represents quite a number of clients. Maybe not from a new business perspective but certainly from a existing business view.
There are many advisers sitting on large books servicing them but are not overly active for new cover, these are the people that are MIA.