Three Mistakes You May be About to Make


A lack of understanding of the incoming regulatory regime by some in the financial advice community has been identified by compliance and consulting firm Strategi Group.

In a statement the company says that based on feedback it’s received there’s some confusion over what’s required of those planning to work in the sector from March 15.

“This is particularly alarming considering the huge amount of work undertaken by the Financial Markets Authority, the Financial Services Council, networks, large advisery businesses, and product providers to ensure that businesses and advisers are ready for the go-live date,” says the firm.

The top three misconceptions identified by Strategi are that:

  • Some advisers believe they have two years to meet the new obligations
  • That disclosure obligations aren’t changing much
  • And that advisers have at least two years to upskill

“All those providing financial advice will need to be compliant with the new legislation, disclosure regulations, code, conduct obligations, transitional Financial Advice Provider (FAP) standard conditions and product provider obligations as of 15 March.

the new disclosure regulations are quite different to the disclosure statements used today…

“The two-year transition period does not exempt you from meeting these obligations,” says the company.

“The two-year safe harbour period pertains to meeting the competency standards in the Code of Professional Conduct for Financial Advice Services only, plus there is up to two years to obtain a full FAP licence.”

Any assumptions that disclosure obligations “aren’t changing much” are also incorrect, it says.

“The reality is the new disclosure regulations are quite different to the disclosure statements used today,” says Strategi.

“Understanding how to practically draft new disclosure documentation is proving to be difficult for many and will potentially require some changes to websites and advice documentation.”

The firm has released a disclosure guidance note that provides an outline of what’s required.

And for those who think they have at least two years to upskill…Strategi says “wrong again”.

…it’s imperative advisers understand the new obligations…

“The new regime is radically different, so everyone providing regulated financial advice from 15 March will have much to learn, regardless of their experience level,” it says.

“Standard 9 of the Code of Professional Conduct for financial advice services requires FAPs and financial advisers to annually review and plan their continuing professional development.

“This is where professional development plans (PDPs) come to the fore. They highlight gaps in competence, knowledge, and skill and outline what training is needed. PDPs are becoming a vital tool for navigating the new advice regime in a compliant manner.”

The firm’s Developing your 2021 Professional Development Plan outlines why such a plan is necessary, who needs to have one, and provides tips on what should be included.

Strategi Group says it’s imperative advisers understand the new obligations and how to meet them.

The firm’s Closing the Gaps course can help financial advisers understand the applicable legislation, regulation, and code, as well as helping to prove competence, knowledge, and skill to operate in the new advice regime.