Don't leave it till last minute, peak body says
The Financial Services Council has revealed many mortgage advisers are burying their heads in the sand when it comes to getting their full licence.
Although the new financial advice regime for financial advisers does not begin until March 16, 2023, it is a requirement that a full licence is obtained in order to provide regulated financial advice.
To encourage more advisers to get on board, the FSC has busted the top 10 myths for financial advisers who have not completed their licensing requirements.
FSC CEO Richard Kilpin (pictured above) said the FSC knew that New Zealanders who received financial advice were more financially confident and had higher levels of wellbeing.
“That is why we have been supporting the advice community through the transition to the new rules over the past few years,” Kilpin said.
“From 16 March 2023, anyone who gives regulated financial advice to retail clients will need to have a full licence or be engaged by a licensed Financial Advice Provider as a financial adviser or nominated representative. If not, they will be breaking the law.”
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Kilpin said it was not just about breaking the law, it was the worry that clients might find themselves without the financial advice that they relied on after March 16, 2023.
“Members of the FSC’s Professional Advice Committee have busted a list of common myths they’ve heard and addressed them to show how important it is to ensure that financial advisers meet the new requirements for giving great advice by the deadline,” he said.
“Financial advice is so important to Kiwis and we hope that busting these myths will help encourage all financial advisers that haven’t yet to take the first step, to find out more and take action.”
FSC’s Professional Advice Committee co-chair Trisha Edmonds said the committee worked with many advisers daily and it was great to see a large majority were prepared or were in the process of preparing for the change.
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“At the end of the day, it will improve financial advice for all New Zealanders,” Edmonds said.
“Equally, however, it is worrying some of the feedback we hear from parts of the adviser community range from denial to misplaced confidence that they either don’t need to or will be able to meet the needs of the regime the day before the cut-off. This simply isn’t the case.”
The top 10 myths busted by the FSC are:
- If I keep ignoring the new requirements, it will all go away
- I don't write any new business and I’ve been in the industry 30 years, so I don't need any new qualifications to be able to advise my clients; my experience demonstrates my knowledge
- I am not worried as I can leave preparing to submit my full licence application until March 2023 – it be OK
- I have my transitional licence so feel comfortable that I can roll up into another of my dealer group FAP’s for full licensing closer to the March deadline – no worries!
- I’m about to retire so I won’t invest in the requirements or IT, I’ll just sell my paper-based client book for five times its value before the deadline
- Once I get my full licence, I can just carry on as I always have, I’ve never kept file notes or a business continuity plan, so it won’t matter
- I’ve never had a complaint and none of my clients would ever complain, so it won’t matter
- It’s only me in the business, so I don’t need all these policies and things
- I'm going to add all my friends who are financial advisers to my Financial Advice Provider (FAP), save them the bother of getting a licence, it’ll be easy
- I have Level 5, so I don't need to be licensed/I am licensed, so I don’t need to have Level 5 training
