Any talk of financial advisers leaving the industry in droves before the end of the two-year transition period has been quashed by training firm Strategi.
The reality, says the company in a blog post, is that the industry is undergoing a long-signalled transition and will emerge from regulatory change in a better shape than before.
“There will no doubt be some casualties along the way and lots of rationalisation of business structures, but we will end up with a younger, more technology literate, and professionally trained industry than before we started the transition,” says the firm.
“Advisers who will leave will be the older ones who were going to retire anyway, or those advisers with sub-scale businesses.”
The firm says compliance costs will not kill the small adviser business.
“A one or two adviser business can become fully compliant and obtain a full FAP licence for well under $10,000,” it says.
“The same business can meet all its annual compliance obligations and obtain an annual independent compliance assurance review for under $5,000 a year.”
Strategi cautions against relying on industry statistics from Australia and bending them to try and guess what might happen in New Zealand.
“Our regulatory environment is very different so using Australian statistics as a rationale for what will happen here is just plain wrong,” says the firm.
“New Zealanders are a resilient bunch and when people see they are in a growth industry like financial services, they are more likely to ‘hang in there’ to reap the long-term rewards.
“There are not many industries in New Zealand where someone with only a Level 5 qualification and a willingness to work hard can be earning over $100,000 a year by the time they are only 30.”