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Have you been thinking enough about qualifications?

Welcome to the New World, the most significant piece of financial legislation enacted in New Zealand, and it's an amendment Act.

Tuesday, April 6th 2021, 10:19AM

by Jon-Paul Hale

Yes, we're all now well aware the new rules apply, the crappy old disclosure documents are gone, as well as designations like QFE, AFA, and RFA. Good, I say to many of these, as they confused the public more than they helped.

And I welcome everyone qualified to be called a financial adviser. We all have our specialities and it doesn't matter which one it is - they are all needed.

When I embarked on the journey to being an adviser, I had the opportunity to pursue any discipline and I chose life insurance. Despite the public opinion of us next to used car salespeople, there is a significant need for sound advice in the space we work.

And many people thought I had lost the plot too. As the saying goes, you don't have the be crazy to work around here, but it helps!

And for a good number of advisers, Friday, March 12 was the date they pulled the pin and said, "I'm done". It will be a shame to see some of them go as practitioners, as they have been good ones.

Just the level of crazy now required for them relative to the job 20-30-40 years ago is vastly different. We now have what I expected back in 2010, but we didn't get it, for me it is business as usual in many regards, while others are still coming to terms with the extent of the changes compared to what we had.

And I think that perspective needs to be stated - there's no judgement on the decisions people make about how they operate. This has to work for the adviser just as much as the provider, client and regulator. Without advisers, tied or otherwise, people don't get access to advice, and we know how bad that can be.

What is going to be initially interesting is how the FMA is going to react. We're now all on the same playing field, as never before, and that's going to be quite different for us all.

I liken it to RFA's standing on the touchline throwing stuff on the pitch. The others players don't like it, but they can't do much about it. For some who haven't been as true to the intent of helping consumers, it's more like taunting the rottweiler on a short chain. The challenge now is the chain isn't there any more.

So I expect to see some early scalps as things get moving. The FMA needs to get a few heads on pikes to keep the masses at bay. Just don't be one of those early heads. Though I suspect they already have a list of doors to knock on.

This leads me to my opening title, the stuff we haven't been thinking about too much.

2018 and 2019 saw many advisers run out and do their level five qualifications, which was good to see. Many advisers didn't do much else to get ready. Forgetting the qualifications were exempt for two years longer than the rest of what's required.

One of the bits that we haven't had made perfectly clear is the qualifications bit.

Some have the core and financial advice - others have the core and a speciality. You need all three if you are one discipline and additional speciality strands for additional disciplines.

The obvious bit is missing for those that did core and financial advice. Still, the ones that did a speciality strand instead probably haven't thought this through. There's a gap that needs covering with the missing financial advice strand.

If this is you, you have two years to get it sorted, put it on the list. It's looking at being a bridging course, not a strand in the way it was.

Something else that has rattled around is how we manage restructures of licenses and the addition of "new" people.

For example, we have someone come out of a bank, was a QFE adviser, and has been attached to a bank FAP. They want to do their own thing, and someone has agreed to take them on under their FAP.

This individual is already in the industry, so has the grandfathered qualifications bit as a financial adviser. What is the approach to set up a company as an Authorised Body on the FSPR? Do they qualify for this as a past QFE adviser?

Do they need to prove all the full licensing stuff, or can they slot in given they are a FA pre-change as their FAP is under a TL?

As we haven't seen the FSPR at work yet this is one of the many questions that will pop up.

Something else that I have been turning over in my head is our client requirements. With Covid and the increased use of tools like Zoom, face to face meetings are significantly less common than they were before Covid. How are you managing that bit around your client being your client? As in whom they are; not just about being a client of your business.

We presently don't have specific AML requirements for insurance, general or life. However, that doesn't mean we don't have responsibilities here to make sure we know to whom are we talking.

Tools in this area are likely to increase; I'm working on a pilot program with one software provider around this presently. They're interested in others like me who can help shape their tool into something practical for us to use effectively.

If you see a need for a good tool that can manage document sign-off with biometric identity checks legally acceptable by law, drop me a line. I'll put you in touch.

Many of these aspects will come under scrutiny in the coming months -  some will be easy to manage - some will require new thinking.

What things are you expecting to see and hear out there that aren't being talked about yet?

Please leave a comment, I'd be interested to know.

Tags: Financial Services Legislation Amendment Act insurance Insurance Advisers Jon-Paul Hale Opinion

« Client servicing is a big issue under the new rulesIf in doubt - disclose »

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