Financial Advice NZ says the FMA’s recent regulatory returns data shows financial advice is being delivered by small, technically competent practices managing multiple advice lines under a single licence, reinforcing what it calls the modern financial advice practice model.
It notes the FMA report shows nearly 9,200 financial advisers now licensed, up 8.4% from the previous year, with licensed financial advice providers now at 1,553. The majority of FAPs have fewer than 20 advisers engaged to give financial advice (see: Strong Lift in Adviser & FAP Numbers).
Financial Advice NZ’s CEO Nick Hakes says the data confirms most advice is delivered through small, independently owned and operated businesses rather than large institutional structures.
“The structure of the sector tells an important story. Most FAPs are small businesses, often with multiple advice lines being delivered under one licence. This is not a simple, single-product operation. The modern advice practice is multi-discipline, either in-house or through strategic alliances of professional advisers, built on operational excellence and deep technical knowledge for complex problems,” he says.
…the structure of the sector tells an important story…
“Home ownership, robust risk management plans, managing family budgets, income certainty in retirement are all areas where financial advisers help solve real problems. The modern advice practice places a premium on value and the client experience, where the scope of advice matters as much as the technical expertise behind it.”
The membership body notes that the FMA’s report finds the number of clients receiving digital advice jumped 90% to approximately 165,000, with 40 FAPs now offering digital advice facilities.
Hakes says the digital growth demonstrates how modern advice practices are integrating technology into their advice process while maintaining the adviser relationship.
…Digital channels extend reach, but the value proposition remains the ongoing relationship and client accountability measure…
“We know through research that the most significant influence on growing and managing wealth is behavioural change. Financial advisers are evolving their value propositions to actively work with their clients as behavioural coaches and educators to implement and review the advice being provided. Digital channels extend reach, but the value proposition remains the ongoing relationship and client accountability measure,” he says.
“The modern financial adviser uses technology to deliver advice efficiently without losing the human element that drives implementation and client outcomes.”
Hakes adds that the organisation will continue drawing on international best practice to advocate for policy settings that support profitable and sustainable advice businesses.
“Value propositions and business models are evolving to meet client expectations. The data shows advisers are doing the work. We’re working to ensure policy settings support that evolution.”