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Putting a locum into your firm may be harder than you think

Under new licensing rules financial advisers are required to have a locum plan, but Jon-Paul Hale argues putting one in place for single adviser businesses is nearly impossible.

Wednesday, November 23rd 2022, 10:07AM 28 Comments

by Jon-Paul Hale

I'm sure many of you have been thinking about the challenge of a locum adviser in your business, given that it is part of the licensing requirements.

This isn't expected to be a significant challenge for those with multiple advisers in their businesses. For the sole operators, it's a little more interesting.

The first challenge is finding an adviser you can trust who can assist if you're incapacitated, or away for a holiday. Which on paper is probably the more straightforward thing to arrange.

The second aspect is having that adviser actually step into your business and sit in your seat. It's not as easy as everyone thinks.

Sure, getting your locum access to your email, usernames and passwords for providers and operating on that basis is just a technical process.

The more interesting piece is operating as you.

Let's look at the FSPR/licensing side of things first.

For your locum to be able to advise your FAP's clients, they need to be added to your FAP because they aren't your clients. If you have a Class 1 license, you have to remove yourself and add them, as Class 1 is only a single adviser.

This not only takes time but what happens to your registration while it's suspended? You must be reconnected to a FAP in a specific timeframe or get deregistered. How does this impact your professional indemnity coverage?

The next bit is documentation; you have many document templates in your business with your name on them, all of which need to be updated or duplicated and updated for your locum.

Once you have that taken care of, then your locum is good to go, right?

Not so fast. What about your provider relationships?

Yeah, those. It's easy enough to sit behind an existing adviser's email and portal/quotes accounts and operate; what about when you have to interact with the provider? Then what?

Because your locum is not you, they have to be independently verified. Your locum can't rock up and pretend to be you; that has professional issues. Not to mention the liability issues for you if they act as you. This applies to sitting at your desk with your email and portal accounts too.

Especially when it comes to claims, as this is the area where the client/adviser relationship will be most tested for needing an adviser in a locum situation. It's not just new business; it's the servicing that goes on where an adviser is required.

Presently, whoever thought up the locum requirements either doesn't understand what fraud is, or they do not appreciate the operational issues advisers have within their roles. The current approach of handing over accounts and access bypasses many fundamentals of existing legislation as well as the latest FSLAA requirements.

And this extends out from insurance to all financial services disciplines. Mortgage and investment, how comfortable are you, and your providers, with someone sitting in your seat being your doppelganger without any verification?

Taking this to the extreme, does this mean providers don't have enough verification on email and portal transactions? (No, I don't want more, what we have has already driven me to the edge).

The biggest issue in the locum's area is the provider agency access and management. The providers are not prepared for this, nor do they appreciate how difficult it could be.

Those that have worked through the sale and purchase process for a client base transfer will have some idea; that process is bloody awful.

This means you need to arrange for your providers to have authority enabled for your locum but not full-time complete access—only access when they have been triggered as your locum.

And you only want this access while they are a locum, so it needs to be turned off again when you're back in your seat.

This is a massively onerous task and process for the providers. In many cases, it will need the implementation of additional agencies with providers as advisers have a range of providers and agencies, and not everyone has every provider.

Even if we ignore the provider aspect, every time you trigger your locum, you need to be able to turn access off; this means you need to change passwords to ensure they can't get in if not authorised.

And what about 2FA, Two Factor Authentication, which is tied to your phone with an app or your phone number with text messaging?

The layers of authorisation, management, technology, and security are significant, and I think few have really thought them through.

Lastly, what about your PI, dispute resolution, and disclosure management? Does this drive additional memberships or extended coverage? And at what cost?

How are you going with all of this? As I'm looking at it going, this is nuts.

The frank reality after being on a disability claim for 18 months myself, the 10-hour clause became very important to cover off the basics and keep things moving. I had an associate at the time too.

Without that, actually bringing in a locum adviser would have been more onerous than the medical claim I was dealing with.

Do we need good business continuity plans? Yes. Do we need good locum plans? Yes. But the stark reality presently is that the reality is unworkable for single adviser businesses, especially if they are dealing with a medical crisis or are no longer with us.

The providers have to be involved in this, and they will have to spend money on their systems to make this work. The average adviser business can't sort this out on its own. Frankly, even larger adviser businesses will have their issues, as agency security and access is still problematic between advisers in the same business and office at times.

And yes, another thing that makes the cottage industry of financial advice harder.

Tags: Advisers

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Comments from our readers

On 23 November 2022 at 11:52 am Dirty Harry said:

you're not saying that the BCP requirements for our licences were dreamt up by people who have no real idea of what we do, and without an authentic and real consultation process....
are eyou?
On 23 November 2022 at 12:15 pm Barry Read said:
Some Good Points JP.

The P.I is not a big issues as long as you are clear which FAP the adviser gives advice under as a Locum. You can be a locum for one FAP and give advice to those clients under your FAP.

The FSC Guide is a great refence and covers the detailed stuff.

Cheers
Barry
On 23 November 2022 at 12:24 pm JPHale said:
@Barry, agree; PI is the flag everyone responds to. The rest really hasn't been thought about.
End of the day, the FSPR/PI piece is fairly easy. The provider issues and actual operational issues are significant issues here.

It's easy to put the paperwork in place for your license; I have XYZ adviser who will be my locum. The reality of making it work is very very different.
On 23 November 2022 at 1:50 pm JPHale said:
@Dirty Happy, no of course not :D

How would that be possible? We've had soo much engagement on this subject, it should be clear as mud, right?
On 23 November 2022 at 2:04 pm Dirty Harry said:
me and a mate have agreed to act as each other's locums in the event...

We duly put in the requisite details of our respective license applications.

So I approached a couple of BDMs with the question about how I might begin servicing the other's clients.
Blank stares and "I'll get back to yous" ensued.
Still waiting. Still not actually sure how I will do it if called upon. And I firmly believe I'm not the only one wondering, it's just not going to be solved right now because the thing right in front of my face right this minute...
On 23 November 2022 at 4:43 pm Murray Weatherston said:
If you are fully occupied in your own practice, have you given any thought to where you are going to find to to locum for another adviser who was fully occupied in their practice?
My understanding is that in areas like GP and pharmacy, most locums don't have their own practice. Their work is to be a locum for a succession of professionals who are on leave or short term indisposed. The locums full time job is being a locum.
On 24 November 2022 at 10:27 am valkyrie6 said:
It's actually boarding on ghost writing.
On 24 November 2022 at 11:26 am Amused said:
@ Dirty Harry - 100 percent in agreement with your comment. Yes, good luck getting a BDM to answer a question around a mortgage adviser having a locum agreement in place with another adviser so that this adviser can then act for their clients if he/she is unavailable. The Bank's likely reaction to another adviser wanting to assist a client already pre-approved for finance by another adviser is that the client will need to first disengage the original adviser. Like you I have a locum agreement in place with a colleague whom I trust but is this ever going to be needed? No.

This whole subject about mortgage advisers having to have a locum is being blown out of all proportion to its actual relevance. If a client is pre-approved for finance at a bank by an adviser and they subsequently can't get hold of that adviser, they can simply call the bank where they are preapproved and the bank will happily take over the approval in place and assist them with a purchase. Or the client can always just approach another mortgage adviser.

I am sure having a locum is relevant to investment advisers who handle client funds but when it comes to mortgage advisers (and insurance advisers) the client can always just go direct to the bank/insurer for assistance. Locums are a good example of what I have been saying for a while now about licensing and regulation. We just seem to be continuing to add unnecessary cost and complexity to an industry that doesn’t need it. No doubt this is all creating news jobs for overpaid civil servants to administer but then maybe that's the whole agenda.

On 24 November 2022 at 1:20 pm Barry Read said:
100% JP and Murray.

Once you dive into the details it gets murky...

As with any good BCP I would recommend running a test day. Get you admin or partner to ring your locum one afternoon and say you are out. The next day ring your office and try and get advice.
On 24 November 2022 at 1:32 pm Dirty Harry said:
out for a day is totally not the point. Every locum will fail that test.

And Muz, the locum is not me and is not expected to work the business in growth mode like I do. It is to respond to queries, claims and such. Preserve the business, not grow it. Meet the clients' needs, not create them. Besides, before you infer that is short of the (regulatory) requirements, it's not.

Besides, if I'm going to be out long enough for that to be the problem then we should be talking succession, not BCP.
On 24 November 2022 at 3:33 pm JPHale said:
Well said Dirty Harry, yes, exactly. It's interim to keep the lights on and not disadvantage clients. More than that is unreasonable expectations.

And yes, if it's a long time and not for a good time, business succession is the big red button to push.
On 24 November 2022 at 3:37 pm JPHale said:
@Barry the out for a day and call the office, that likely will be ok. But then most of us can disappear fo a couple of days to a week nd nothing explodes too.

The issue with calling the office and asking about advice is the background access to actually provide that isn't there to work.

As Valkyrie put it, it would be ghostwriting, something the industry wants to avoid, and specifically, what the new framework is designed to ensure doesn't happen.

Presently the "sit in your seat" expectation is ghostwriting and falls under many legal statutes of concern. The use of document laws are the first ones that come to mind. There are pecuniary advantage ones too, depending on what goes on... Fraught if not done right!
On 24 November 2022 at 4:54 pm Barry Read said:
Succsesion is one option for long term BCP planning for sure. Locum is short to medium term. I would recommend they be combined.

Having run BCP testing at corporates, Out for a day is totally valid as a test of locum processes, it shows can you access systems, emails and phones be answered or transferred etc, will product provider take the locums call and allow access to information etc.
If you don't test then what is your control for the BCP plan??

I know plenty of adviser businesses that do and pass this type of testing.
On 25 November 2022 at 1:12 pm JPHale said:
@Barry, as I said in the article in a larger advice business, this isn’t necessarily a major issue, yes, testing it absolutely is a requirement.

The challenge here is that provider aspect; the present approach with providers means you have significant issues in setting up locum arrangements for agencies.

As Valkyrie6 pointed out, if the locum was able to access clients without an agency authorisation in place, you’ve either got a security problem, or you are ghost writing, both are an issue under the current new rules.

Not to mention the management of turning it on and off as required. Privacy act 101, manage access to information to those authorised to do so. And limit access according to needs.

It's a far bigger issue than the majority have thought about or considered.

And Dirty Harry’s experience commented is largely what I have had with providers on this too.
On 25 November 2022 at 6:11 pm Amused said:
@ JPHale, Good comments around the privacy aspect. So if the providers aren't onboard with locum agreements doesn't it end there? I presume that the FMA understands this?

Mortgage advisers and their clients have functioned perfectly well for years without needing to have locum agreements in place. We just seem to be once again with licensing trying to find a solution to a problem which doesn't actually exist. As mentioned I have a locum agreement with a trusted colleague but neither of us can see us ever needing to use it.





On 30 November 2022 at 10:21 am JPHale said:
@Amused, pretty much. If the locum sitting in your seat can't legally access anything to do anything, there's not a lot of point to them being there.

Interestingly, while the full license application does ask about a locum, it is part of the business continuity "requirements" / understanding, and having a locum isn't strictly an FMA requirement.

So that does leave us with; what's all the noise about?

TBH as good business practice, we should have effective continuity planning, however, this subject, on the whole, isn't well thought out and is feeling like a wet finger in the air, "yeah, that sounds good, let's run with it" situation.
On 7 December 2022 at 10:01 am JPHale said:
Given the strong comments about CoFI in the adviser space, some of them mine, I'm now wondering what providers are going to be saying about Locum’s and servicing under their agency agreements?

We’ve had changes to agency agreements with FSLAA and some in anticipation of CoFI, now we have CoFI with noise in the Financial Adviser space, are we up for more noise around BCP and locum/service management too?
On 24 February 2023 at 10:22 am Tony Vidler said:
I've been observing this issue (and advising upon it) for a little while now and must say that it is being made more confusing that it needs to be by many market participants.

The first thing that should be put to rest is the idea that a Locum is somehow delving into ghostwriting. There is a situation where that may arise (which I will come to below), but primarily this concern is a bit of nonsense.

I think the situation is fairly clear on the lines of responsibility and control in NZ presently: a Locum adviser is also a fully competent and qualified adviser in their own right to begin with in the overwhelming majority of situations. The majority of the time in the existing market the Locum will be most likely to be operating under their own licence and meeting their own licencing and agency agreement conditions themselves as they are running their own practices. Now that may change in time and pure "locum services" businesses may evolve here, but they don't exist yet to the best of my knowledge. Todays NZ FA is obtaining locum services from another licenced NZ FA. That is the reality of the market place right now. That actually keeps things relatively simple as it follows that the Locum Adviser providing advice to another advisers client remains responsible themselves for the advice they give, and are covered by their own PI and DRS membership for the advice they give in the overwhelmng majority of situations.

Let's be clear here: any duly licenced adviser can give advice to any consumer in the country (within their bounds of competency) any time they wish to...the concept of "client ownership" is an issue that WE have. The regulators and the consumers themselves don't. Any adviser can provide advice to any consumer any old time they like, provided it is within their competency and licencing restrictions, etc, etc.

That means there is actually no issue with (say) Reg-The-Riskie stepping in to advise Middle-Income-NZ-Mary on the business she put in place with Penelope-The-Planning-Pro. That happens every single day right now all around NZ. It is usually called "competition".

It is Reg's responsibility to stay within his boundaries and operate within his area of competency. He also remains responsible for any advice he gave. If Mary is unhappy with things, she complains to Reg's DRS...not Penelope's. If Mary wants to have a crack at Reg for negligence, his PI company responds...equally; Reg is not liable for whatever advice Penelope provided historically. He didn't give it.

It is an everyday situation for hundreds of thousands of Kiwi's that they are obtaining regulated financial advice from multiple duly licenced FSP's anyway. So what's changed with a Locum now giving them advice as well as the bank, their mortgage broker, their commerecial insurance broker, etc?

The regulator is completely comfortable I believe with duly qualified and licenced advisers stepping in to provide advice to the clients of another Class 1 FAP for a limited period of time. If that provision of advice begins to look like it might become a long term arrangement (beyond the 3 month european holiday) then it is a material change to the operation of the FAP and the regulator (quite rightly) would want to re-consider the licence of the FAP which is obtaining the Locum services. After all, the business is now not operating the way they told the FMA that they would operate. Fair enough that that the regulator wants to re-assess the licence.

All is fine so far...regulator and PI insurance and ability for any adviser to advise any consumer is actually pretty clear.

The real issues are "privacy consent" and agency agreements.

There is a fair question as to whether the FAP's clients are ok with their details being automatically provided to another adviser by the FAP when a Locum arrangement is triggered. That's a reasonably easy matter to resolve though, particularly over time. But it is an issue that every adviser working a Locum arrangement needs to be mindful of and alert to, and an issue that every FAP with a Locum arrangement needs to position for.

The agency agreements is a bit more problematic, and largely because of COFI.
If Penelope had the bulk of her in-force business with XYZ Insurance Ltd and they don't want to deal with Reg for whatever reason, as is their right really, then it gets a bit awkward. Reg doesn't have an automatic right to either obtain agency with XYZ simply because he is Penelope's locum, and nor does he have an automatic right to place business there if he needs to in order to service Penelope's clients. XYZ simply do not have to take business from him. If he does try to place it under Penelope's agency because he doesn't have agency himslef with XYZ then we are in the territory of ghostwriting, leaving Reg exposed on PI & compliance obligations, and probably now also jeopardisiing Penelope's book of business with the XYZ company.

Very awkward.

There is no doubt that Reg does not need agency with XYZ to provide advice on their products (provided he is competent to do so) and nor does he need agency to obtain information from XYZ (the client provides that authority to XYZ and they are obliged to provide the information to Reg if the client asked them to). So having an agency isn't really a requirement to provide Loucm services from those perspectives...a lack of agency agreement betwen Reg and XYZ makes things more awkward, but is not itself a barrier necessarily.

The real issue is establishing that Reg is competent. The regulator and NZQA may be happy that Reg is competent to deliver advice to Mary around her insurance portfolio, but now the XYZ Insurance company have a poorly defined obligation in that mess which is COFI to make sure he is competent to advise specifically upon their products. We know this because their external lawyers said so. Nobody else is really sure. Because nobody is really sure apart from the high-priced-lawyers the XYZ insurance company errs on the side of caution and says they need to approve the Locum, and that the Locum must go through their training or accreditation process in order to advise Penelope's clients....there is the mess. XYZ think they have to somehow approve the Locum arrangement...which they don't. They do appear to have to be satisfied that Reg is fine to advise upon their products - so they in turn can reassure the regulator that Reg is good to go on XYZ product advice. But that is only true if Reg has an agency with them. If Reg doesn't have an agency with them they have no control at all over his advice to Mary.

That is the problem area which has been created by COFI...the uncertain lines of respopnsibility for establishing competency - which were clear until COFI introduced vague expectations of product providers having some responsibility for approving competency - which clouds the entire issue of Locum arrangements.

The bottom line is that the adviser/FAP remains 100% responsible for the advice they provide, and they remain 100% responsible for ensuring that they stay within their bounds of competency and only advise upon product and business lines where they are able to demonstrate that competency. For anyone contemplating who to use as their Locum it is imperative then that they select someone with the same business and product line competencies to begin with, and it is certainly easier all round if they choose someone who holds agencies with the same carriers that their clients are aleady working with.







On 24 February 2023 at 1:45 pm JPHale said:
@Tony Vidler well said and correct; the core issue for locums is the interface with the provider. That was the crux of what I was talking about.

The bit around licencing and linking, it's the FAP's client and the FAP is responsible for them, which means that the FAP needs to have that licensing link with the locum, AB/FA/Interposed. This is the technical bit, for the FAP to remain responsible for their original client.

But you're right any adviser suitable for the job can advise any client; that's how it works now. But that would involve new engagement and takeover of the client by the locum adviser and their FAP, as would be done with a client approaching a new adviser. This somewhat defeats the point of the original FAP being responsible and retaining that client in the original FAP.

On top of that, does the locum business want the liability of the past advice? Because that's what transfers when you don't have the licensing linking. The new FAP is endorsing the past advice with the review of that client. With financial advice being advice to hold, acquire, or dispose of a financial instrument.

Sure, you can argue that the complaint should sit with the originating FAP, but the rule book says the current FAP is responsible. Yup, new rules that still need road testing, but that's how they are written...

The practical application of what you have outlined does have a few wrinkles, it should work that way, and you should have someone competent and qualified in the appropriate product lines. But there's the right thing to do, and then there's what sometimes actually happens. Most will likely wing it and do exactly what you have outlined, not understanding the risk to the locum FAP that comes with it.

The added wrinkle is that some providers often won't release information or follow up with the locum advisers on the requested changes without being under the existing business. That means that you have to work through the client, and that gets sketchy on the information flow or you trigger a change of servicing, which needs to be rectified later on and comes with the regulatory risk above.

Even as the servicing adviser we struggle to get information from certain providers for renewals and other policy admin now, let alone someone coming in trying to figure it out at short notice with a client under pressure, as that is usually the case, Murphy's Law.

All of these things have an impact on the delivery of service to clients, and clients being clients, will complain about some of these things.

This means that the plans around this need to be clear and well-understood, and I don't think that's what's going on out there. And the providers certainly aren't scoped to manage this presently.

Can it be as simple as someone walking in, sure, but it comes with a bunch of other considerations I'm not seeing considered when you walk though all of the moving parts, and there are a lot of moving parts.

On 24 February 2023 at 1:52 pm JPHale said:
@Tony Vidler
Specifically, on the subject of ghostwriting, this is more the idea, and it's been suggested more than a few times in other discussions, which is why I mention it, where someone literally sits in your seat and drives from there.

For many, this is an easy pragmatic solution, and no one is the wiser until you have to talk to someone.

As I said, I have enough challenges with the present validation approaches that I'm the one on the end of the fibre line, I really don't want to see that get worse... But this is a potential issue that needs managing by providers when advisers are incapacitated.

Having had two longer terms off work, I'm acutely aware of the challenges that present advice businesses. And some of it is not pretty.
On 24 February 2023 at 4:38 pm w k said:
why don't we call for a meeting with the bright spark/s who came up with this idea (not all that bad ... BUT) and we advisers direct all the challenges we faced with this locum thingy, and ask whoever came up with this idea, to address those issues / challenges. and i request only just one rule if this person/s bothers, cannot tell us to seek legal advice.

hopefully this exercise will knock some sense (if penetrable) into them that what looks good on paper, may not necessarily work in practice.

almost every profession (including IRD) under this govt have gone on strike, hope we advisers don't have to resort to such action.
On 25 February 2023 at 6:10 am Tony Vidler said:
I'd love to know where to find this "rule" which apparently suggests that whenever I review a piece of business done by someone else I become responsible for all the advice that someone ever gave.

Your suggestion of how it works JP is that by reviewing the advice of a 35 year veteran who has been working with a particularl client for the entire career, I would assume liability for the 35 years worth of advice, simply because I reviewed the clients existing portfoloio. My advice to the client might be incidentally "do nothing, all is well here". That is still regulated advice, but your interpretation of "the rules" is that I somehow just became liable for the advice delivered over 30 years ago to cancel a policy at that time.

I simply do not believe that to be the case. I am persuaded by evidence and fact however, so please direct me to the particular rule, case law, regulatory guidance note, legislation or whatever this interpretation is based upon.

I'll wait.
On 27 February 2023 at 12:55 pm JPHale said:
@Tony Vidler
FSLAA - 431C Meaning of financial advice and regulated financial advice

a. makes a recommendation or gives an opinion about acquiring or disposing of (or not acquiring or disposing of) a financial advice product; or

This extends to the advice statement that your cover is ok; carry on.

This commutes that into financial advice that the adviser becomes responsible relating to the statement the existing cover is ok/fine/whatever the statement, to hold the policy.

The extension of that, depending on how far down the track of doing obscene things to spiders you go, becomes a test when that client submits a claim that doesn't fly.

I've said it in other articles at the time we were discussing FSLAB before FSLAA; there's an underlying challenge in endorsing existing cover, be it taking over from another adviser or from your own book before FSLAA. In that, not identifying the issues with the cover (due diligence and research) could result in you, as the adviser, endorsing a policy or benefit that isn't up to the task expected by the client.

I.e for example, if the client has a disability benefit and didn't state they had a shoulder injury prior, and you're doing the review, maybe moving the cover to another provider and finding you have exclusions with underwriting. If the client, with your advice to hold the existing cover as a result, does so without addressing the non-disclosure issue, the new adviser is potentially responsible for that under the above clause.

A clause I have discussed with our friends in regulatory places so that I have my understanding clear.

A little less obvious is taking over a policy for servicing without asking any questions, which I'm sure we all have, only to find there are disclosure issues at claim time.

Did you do enough when you took that policy over and implied that it's fine, with nothing to be done with it? Did you identify the issues appropriately from the information on your file?

There's a significant gap here between what we would consider reasonable as advisers and what the law presently states without specific guidance from the FMA or case law around it.

As I have said many many many times, you need to be cautious, so you're not the first one tried out by the FMA to draw the lines in the nice clean sandy beach we're currently playing on.

Remember that the FMA has recently come out to say they will take cases even if they don't have an expectation to win. I think this is so that they can get some lines on the playing field, but that's also my opinion too...
On 27 February 2023 at 12:57 pm JPHale said:
@w k

The problem with bureaucracy is I don't think there's a single person on this one. And it's certainly not been thought through from an operational perspective...
On 27 February 2023 at 3:55 pm w k said:
@JP, the reason why it's not been thought through? isn't it obvious the wrong people are calling the shots!!! if the right people are onboard, then we don't expect this type of things to happen time and time again. it's only only the locum thing. the cofi, aml, cccfa, and what have you. they're all in a one huge mess of tons of regulations where nobody knows how to put it in simple terms for everyone to understand.

quote: "if you can't explain it simply, you don't understand it well enough." hence, you will even bet on a losing horse.
On 27 February 2023 at 4:39 pm Tony Vidler said:
So your interpretation of "liability" is a series of if-this-then-that assumptions. While I agree that advice given on existing products or strategies put in place by another person is still my advice, for which I am responsible, it is illogical that I can be responsible for advice they gave and for which I have not advised.

Again, to use the dramatic example from earlier. If I give advice on todays portfolio of products put in place by you, that does not extend to me being responsible for advice you gave 10 years ago on a product I have not seen or reviewed and provided advice upon.
On 8 March 2023 at 3:55 pm JPHale said:
@Tomy Vidler, I think we’re looking at the same issue from slightly different view points. And my frame on this is insurance risk not the other financial services products.

There's no dispute on the advice at the time in terms of the products and benefits advised vs now, that's a constantly moving target and is with the original adviser.

More the issue is the execution and implementation piece, where the issues with the cover being endorsed to hold is problematic. This applies exclusively to life insurance, as general renews every year, and mortgage, investment, and banking don't have this disclosure risk.

If the adviser hasn’t done the due diligence around the disclosure of the time, and/or terms, in stipulating the cover is sound and can be relied on, they have a potential professional risk. That's the point I'm making here.

Under the previous legislation this wasn't an issue for the “new” adviser, the liability clearly sat with the old adviser, but was similar to the new rules in the code for those AFA, but nothing else for the RFA’s.

As a risk adviser you were somewhat crazy to add this level of responsibility to your business unnecessarily. This was the crux of the only risk case taken by the FMA under the old regime that most misunderstood what the FMA was trying. Replacement issues sure that was the face value issue, documentation and advice was the real issue being tested and lead directly to the FMA documentation license conditions.

Under the new rules, it's now defined in law for all of us, and it significantly increases the risk for advice provided and the judicial risk on that advice on top. Being that the old approach to this was FDAC not court!

Yes, we’re in the weeds a bit here, at the same time the core issues of conduct we have assumed from the commentary and code don't reflect the legal definitions as well as we think they do. And this is common across the industry.
On 8 March 2023 at 4:00 pm JPHale said:
@w k somewhat, what we have been fighting with is the lack of understanding of the advice industry, where those that venture in to gain a better understanding are shunned by the outsiders when they return, because their knowledge strongly contradicts the outside opinion and expectation.

These people have time and time again had this experience, as too I’ve seen it in action. I think most of us have some experience with this.

The old story of we couldn't possibly let them self manage, but we won't entertain their conflicted and biased opinions

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ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.39 6.89 6.75
ASB Bank 8.64 7.39 6.89 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.29 6.85 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 ▼7.89 ▼7.45 ▼7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - ▼7.09 - -
Co-operative Bank - Owner Occ 8.40 ▼7.29 6.89 6.75
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 ▼7.79 7.39 7.25
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.85 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.59 7.29
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.35 7.89 7.65
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.35 6.89 6.75
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.90 7.39 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.95 7.45 7.29
SBS Bank Special - 7.45 6.95 6.79
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 7.05 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.19 7.55 7.55
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.39 6.75 6.75
Unity 8.64 6.99 6.85 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 7.15 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.45 7.37 6.77

Last updated: 1 March 2024 10:00am

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