[The Wrap] FSLAA isn't the only big change advisers need to be aware of

The world of financial advice changed significantly last month, and maybe more than many people realised.

Friday, April 2nd 2021, 7:33AM 2 Comments

by Philip Macalister

March 15 came and went, the sky didn't fall down and everyone got to work pretty much as usual.

Sure AFAs were no longer AFAs and RFAs were gone too. If you belonged to a QFE, in all likelihood you are now with a FAP.

Beneath the surface though there are many long-standing advisers deciding the new environment is not for them. 

One good example is an insurance adviser who has been in the business 52 years. He told his clients he was retiring with "mixed emotions".

He was leaving "certainly [with] some sadness at departing a career that has allowed me to meet and work with some amazing clients, that has allowed me to learn and grow as a person and that has rewarded me well for the many long hours of hard work".

A lot of valuable experience is being lost and this is not good considering the aims of the Financial Services Legislation Amendment Act.

FSLAA will change the face of the advisory industry and will do so for years to come. But another event, a day after the new regime kicked in is just as important for the future of advice.

On Tuesday March 16 there was the surprise announcement that Financial Markets Authority chief executive Rob Everett is stepping down from the role later this year.

While some in the advice world are not big fans of the FMA and by association its chief executive, he has been a supporter of financial advice. He told me that when he applied for the role supporting advice was critical. 

Now we are in a new regime where the FMA will be monitoring all advisers, not just AFAs, things will change.

The industry should be hoping that whoever goes into the CEO role will nurture and support advisers.

The FMA has had two chief executives in its nearly 10-year existence (birthday next month). The first one is best remembered for his approach to financial advisers and the now infamous "Cowboys" campaign. The second one has been a stark contrast.

Advisers need to have their fingers crossed that the FMA board make a sensible appointment with the best interests of advisers and consumers at heart.

Tags: Financial Services Legislation Amendment Act FMA FSLAA Opinion regulation Rob Everett The Wrap

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Comments from our readers

On 2 April 2021 at 11:20 am two cents said:
I watched the mission creep in the USA post-GFC, where organizations founded on the principles of professional guidance and advice suddenly became enforcers. It was not pretty.
On 6 April 2021 at 7:00 pm Chatterbox said:
I watch with hope that FMA will decide to investigate potential and existing sharp practices that are nothing less than fraudulent, misleading, and/or deceptive market practices by institutions that pull the wool over the eyes of their financial advisers while churning generations of customers in and out of products and funds - while knowing self-reporting will not expose them - and knowing even if FMA prosecute there is no need to repay customer funds that have been leeched or disappeared into a big black hole.

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