The past few months have been a whirlwind for financial advisers, but there’s still some ground to cover before the full licensing deadline, says Katrina Shanks, CEO, Financial Advice NZ.
Today, more than 3,000 financial advice businesses (including approximately 1,800 FAPs and 1,200 authorized bodies), and more than 10,000 financial advisers are operating across the country. However, the composition may change once full license applications are submitted, says Shanks.
“For the time being, the vast majority (82%) of all licensed FAPs are small businesses of less than 10 advisers, with as many as 50% being single-adviser FAPs,” she says.
“There’s also a healthy diversity of advice areas, which to me goes to prove – once again – that New Zealanders can rely on widespread access to quality financial advice, reflecting a broad range of needs and goals.”
Shanks says there has been good early traffic in FAPs linking their advisers. However, with only a few days left to go, “…there are still many missing from the count”.
“My recommendation to those who are yet to complete this step is to act quickly,” she says. “The cut-off date is 15 June 2021, and advisers who have not been linked to their FAP by that date face the prospect of being de-registered from the FSPR.”
Information on how to link a FAP to a financial adviser can be found here.
It’s also critical advisers move through the full licensing process relatively early, says Shanks. Advisers must have a full license by 15 March 2023 (not just applied for one).
“Being a more complex application, it will most likely take longer to process it,” says Shanks.
“Both the FMA and Financial Advice NZ have made plenty of tools and resources available, to help advisers familiarize with the requirements.”
Shanks says that some FAPs have already filed their full licensing application, but the advice from the regulator is to avoid ‘rushing at the gate’, but rather think about “…what tomorrow looks like”.
“Depending on their circumstances, some advisers may be thinking about their succession plan,” she says. “Single-adviser FAPs might like to expand in the near future, by getting more advisers on board.
“Looking ahead – with a certain degree of flexibility – may help them think strategically, and give them added clarity of better business practices.”
“Following an early assessment, the FMA noticed some websites and disclosure material haven’t been updated yet according to the new requirements,” says Shanks.
“While acknowledging the added pressure that the new regime has brought about, the regulator highlighted that it will keep an eye on these components as well, particularly websites that are still referring to the old terminology.”
See our story: Dates Announced for Financial Advice NZ Roadshows.
Financial Advice NZ has a range of helpful webinars for advisers here.