Like everyone else, advisers want a glimpse of the future, and this week was no different when we published a list of predictions for the year ahead…

The team at Strategi Group has released its top five predictions for the year, and among its list is are warnings that the regulator, insurers, and clients, are looking more closely at the actions and on-going training of advisers.

5: Recruitment

Strategi says recruiting new advisers and getting them through the New Zealand Certificate in Financial Services (Level 5) version 2 can be a challenge, and that upskilling existing advisers so they have more than one specialist strand can take time and meet some adviser resistance.

“Those who provide financial advice need to hold the relevant specialist strand otherwise they cannot provide that advice post 16 March 2023,” states Strategi.

4: CPD

An increased focus on Continuing Professional Development (CPD) is at number four with Strategi saying all FAPs, and those who provide financial advice, must comply with Code Standard 9 relating to keeping competence, knowledge, and skill up to date.

“This places more obligations and work on the FAP and its advisers,” states the firm.

3: CoFI

Strategi says insurers and banks are getting ready for the Conduct of Financial Institutions (CoFI) regime, which was passed into law in June last year, and that companies will start to enforce adviser and FAP obligations in their distribution agreements.

“They have the ability to stop paying commission if contract obligations are not met.”

CoFI legislation is planned to come into force in early 2025.

2: Client scrutiny

An increasing number of clients are taking an active interest in the products they have bought or invested in, says Strategi.

“This can lead to some clients asking why they are in a particular product, shopping around for lower cost alternatives, or questioning the value of the advice they receive,” states the firm.

1: Unprepared advisers

Top of the list is Strategi’s warning that the FMA could play hard ball, putting some unprepared advisers under pressure.

“If the FMA decide to flex its muscles and fully enforce the law then this will present a challenge for those not fully prepared,” states the firm.

“FAPs and advisers have had two years to prepare for 16 March and should already be operating in a fully compliant manner.”

Please click here to read Strategi Group’s top five predictions in full.