A key industry figure says financial advisers need to act now if they intend to continue in the business after June this year.
“We all know that big changes are coming to the financial adviser industry and there’s no time to ignore the inevitable issues this is throwing up for everyone in the business.” says Steven Burgess, CEO of Compliance Refinery.
He says it is imperative that all industry players not only understand the changes but – more importantly – prepare for them too.
“You need to make a decision now if you have not already made one,” he says.
“The FMA has noted that the obligations won’t prevent smaller adviser businesses from becoming a licensed Financial Adviser Provider (FAP). However, this will introduce significant changes to how you run your business and business owners should consider them.”
The options are:
- Form an FAP
- Join an FAP
- Exit the industry
“In many senses you are on your own,” says Burgess. He recommends you get started now.
“Don’t rely on anyone else,” he says. “We know key details of the new financial advice regime, advisers and businesses should be active in documenting their procedures. Your decision should already be made, if you are becoming an FAP you should be well into your preparation now.”
Advisers can ask for a Transitional License that will be valid until June 2022 – but the deadline to apply for this is 29 June this year.
The Transitional License enables financial advisers to continue providing advice to clients until June 2022.
“All Transitional License holders have to apply and be granted an FAP license before June 2022. If they do not they will no longer be able to provide advice unless they are under another FAP.”