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Smug or juggling?

As March 15 approaches you could be in either camp. Russell Hutchinson with five tips to help get you over the line. 

Monday, February 8th 2021, 8:59PM 1 Comment

by Russell Hutchinson

Walking into New World the other day I got to feel smug as I carried my shopping bags in while watching someone else juggling about a dozen items in their arms as they walked out.

Perhaps you are feeling smug about having prepared for the implementation of the new regime. Some haven’t.

Perhaps your Plan A has failed – and you need a Plan B. Perhaps you were due to slot in under someone else’s FAP – and you were let down somehow.

It’s nearing five weeks from the go-date for the new regime.

Perhaps, by the time you read this, it is closer. It may be too late, but maybe not.

Can you still make it? At the time of writing, yes, you can. But you may need some help.

Here are five quick tips to try and get through the thicket of work required to still give some financial advice (perhaps more limited than you did) after March 15.

1. You must have an entity on the Financial Services Providers Register. You may have this already in which case, skip to the next step. If not, get to the Companies Office website and register. If you have no entity you could perhaps skip that step by going as a sole trader, that will save time, but create other limitations later.

2. You apply for a transitional licence. As a very small business you will find the process simpler. Your challenge is to complete it quickly. You may, at this point, choose to limit the range of advice services you intend to offer. Think of it this way: if 80% of your revenue came from advice on life and health insurance, do you need to jeopardise the whole for the 20% that did not? You can build back better later. Focus may enable continued operation of some kind.

3. This is probably the most time-consuming. You need to establish documentation for governance and business processes. Several companies and some dealer groups have programmes to help you achieve this. Using their help may save you sufficient time to get across the range of issues that need to be addressed. They are broad: they encompass not just governance processes, conduct, and compliance assurance, but all the non-FSLAA issues of running a business as well.

4. Document your advice process. With the Code in one hand and your most recent client files open you should be able to document your advice process in a few solid sessions of writing. You won’t have much time for process improvement, but you will be making a start.

5. Lastly, you document the qualifications, skills and experience required to competently provide the advice you intend to offer. Identify any gaps and start to think about what’s required to maintain your competence. Fortunately, if you can get all this done in the next few weeks, with a transitional licence, under the exemption available in the regime, you have the opportunity to fulfil the competence requirements during the first two years.

I recommend that once you have it all pulled together, you get some professional help to review it all. Improvement is expected of us all, it’s not a one-and-done change. Besides, you wouldn’t want to base your whole compliance plan on a 500 word article in Good Returns.

This is merely a signpost for the direction of travel, not the route map for the whole journey.

If you don’t enter the regime through transition, you will need to meet these from day one and be fully licensed. Or stop giving advice. Or reconsider joining someone else’s FAP.

Tags: FAP licensing Opinion regulation Russell Hutchinson

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Comments from our readers

On 11 February 2021 at 6:13 pm JPHale said:
Nicely put! At the very least, beating my usual drum here, get your TL in your back pocket and buy yourself some career insurance ;)

I've been a long way down this path for ages, and I still have a heap to do... Not sure how others are going, but the mountain is significant.

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