Financial advice boss on an expense that's "totally" worth it

Financial advice boss on an expense that's "totally" worth it | Insurance Business New Zealand

Financial advice boss on an expense that's "totally" worth it

There are only 23 weeks left before all financial advice providers in New Zealand must either operate under or hold a full licence to continue as advisers. For Insurance People Limited director and shareholder Simon Fisher (pictured), investing in an adviser’s required qualification is well worth it, if you think about the flip side.

“The biggest challenge over the last 12 months has been to make sure that we’re in a position to have that full licence,” Fisher – who has been in the industry for 26 years, initially on the insurer side – told Insurance Business. “It’s not just about getting the licence, but making sure that you’ve got all the systems and processes that are required as part of the licence... It took a lot of our focus.

“Obviously, come March 16, if we didn’t have our licence, we didn’t have a business, right? And we’re not in a business where we can just sit there and go, ‘Oh, it doesn’t matter’, because every day we’re giving advice. It’s not for everybody, but for those people who want a long-term future in insurance, getting them to do their [New Zealand Certificate in Financial Services] Level 5 means they can continue.”

At present, the company has about half a dozen colleagues completing the qualification process while employed but not providing advice on behalf of Insurance People.

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Fisher, who himself still provides advice while running the business alongside fellow director Katrina Church, explained: “What we’ve done with our people who have been doing their Level 5 is that they’ve been doing non-advice roles with us while they’re doing their study. They’re working for us and they’re learning the business – that’s the key thing.

“I think this is probably where the industry can improve a bit. Putting people into a role for six months, non-advice, while they do their Level 5 – they actually get to understand the business. Because prior to mid-March 2021, anyone could be an adviser; there was no real requirement. By default, you probably had people that were giving advice in week one – and I use the phrase ‘giving advice’ loosely – when actually they didn’t really understand what they were talking about.”

In Fisher’s view, providing this period in which team members get to learn the business while working on their qualifications is going to prove beneficial in the long term – so much so that Insurance People shoulders the cost of studies as long as they stay on for at least two years upon passing.  

“We pay for it,” Fisher told Insurance Business. “Because at the end of the day, it’s our licence. The cost of paying for it is far less than the cost of not having a licence, or not having them being able to give advice. If we have limited staff that can give advice, it will cost us more than it would have if we’d actually pay. So, that’s the attitude that we take. It’s a very small cost in the bigger scheme of things of being able to run your business in the new licence regime.”

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He added: “When people give advice, a) they’ve got to have the Level 5 – that’s first and foremost. But b) they’ve either got to have a licence or be under someone’s licence. So, if someone’s giving advice under our licence, for instance, we need to make sure that we’re doing our checks to ensure that the client is getting the right advice.”

For the Insurance People director, it has been about making the financial advice sector more credible.

“I think the changes are good changes,” said Fisher, who believes it’s “totally” worth it to spend on the studies. “It gives a little bit more credibility to the industry. It’s been a very good exercise to make sure that your business is doing what it should do, as part of the licensing requirements. You had to complete the application, but coupled with that you had to make sure that you actually could back it up… It’s good to make sure that people are being held accountable to the licence requirements.”

According to the Financial Markets Authority - Te Mana Tātai Hokohoko, as of the end of September, 86% of financial advice providers in the country have either initiated or completed their full licence journey.