FMA says advisers are generally well prepared for new regime

FMA says advisers are generally well prepared for new regime | Insurance Business

FMA says advisers are generally well prepared for new regime

With the deadline for transitional licensing just over four months away, the FMA has completed an adviser forum circuit across New Zealand, speaking at the Get in Shape advice summits in Auckland, Wellington, Christchurch and Dunedin.

The FMA was represented by principal consultant Derek Grantham, who spoke to 1,250 total advisers and answered their questions around licensing and preparation. John Botica leads the FMA’s market engagement activities, and says that advisers are generally well prepared for the coming regime – though some still need to make crucial decisions around how they are going to approach it.

“Hundreds of advisers have so far applied for their transitional license and been successful,” Botica told Insurance Business.

“There’s another group of advisers who are still absorbing information, and there’s a (not very large) group of advisers who are doing a bit of catchup. They’re aware of the timeframes – it is 2020, everyone’s back to work and focused, the date is ahead of them, and they know that they need to put their skates on.”

Observing advisers at the Get in Shape summits, Derek Grantham says that the vast majority seem to be well prepared and clear around the processes and requirements, with most being more than willing to step up and do what needs to be done.

“Angus Dale-Jones from the Code Working Group asked the audience how many of them were still concerned or struggling with getting their heads around the competency, and only two or so hands went up in the room in Wellington,” Grantham noted.

“That was interesting to see, as it seems a lot of people are focused on moving forward and doing what they need to do.”

“On the panels, I talked a lot about those options tools and MBIE’s factsheets, which offer useful information around liability, and around advisers belonging to multiple FAPs,” he added. “That’s a question that some people have asked – can an adviser belong to multiple FAPs? We’ve been able to take them to that factsheet, which clearly sets out what the position is.”

Botica says that as a regulator, the FMA has put a significant amount of resources into engaging with the industry, and has been personally meeting with many advisers over the last few years. He says the FMA recognises that the changes can be tough for smaller businesses, and is committed to working with them to make the journey as simple as possible.

The FMA has spoken to approximately 3,000 individuals over the past few years, either directly or through forums such as the Get in Shape Summits.

“We’ve gotten to know the advisers a little more through this process, and we don’t want to create additional burden,” Botica said.

“We can finetune the process, and that’s exactly what we’ve done in the language that we’ve used, and the factsheets that we’ve produced. It’s been a fascinating journey for us, and I think advisers have appreciated our openness and willingness to talk with them.”

Botica says the FMA has received particularly positive feedback around the ‘options’ tool, and its various factsheets and portals which outline the licensing process in plain English.

 “There have been some process-oriented questions asked in the Marketplace at the summits, but we got a lot of positive feedback around our ‘options’ tool and the licensing guide that we’ve released,” he explained.

“Our licensing portal can be tailored to particular businesses, so if you’re a single-adviser business, you’ll only see questions that are relevant to you.”

“Navigating through legislation and requirements can be quite difficult, particularly for smaller businesses – and the majority of financial advice businesses have five advisers or less,” Botica concluded.

“We decided to get out and meet as many advisers as we could two-three years ago when the changes first started to come through, and that helped us to understand who the regulated population is, learn about their business, and allow them to meet us and break down those barriers.

“We are here to help if they need help along the way, and we’re really happy to be able to engage with them to make the journey as straightforward as possible.”