“We believe that this is what will happen, but we just don’t know”

Broker group says regulator ambiguity on requirements is challenging

“We believe that this is what will happen, but we just don’t know”

The FSLAA officially comes into force on the 29th June 2020, bringing financial advice regulation into the Financial Markets Conduct Act 2013 – however, less than five months away from the official start of the new regime, advisers are still facing a lot of confusion and uncertainty about their future.

On the side of the support groups, Astute Financial CEO Sarah Johnston says going directly to the FMA for advice has been a great way of getting reassurance around any new processes, and consulting with regulatory experts has also strengthened their position in the face of the new regime. However, she says the ambiguity is still undeniably difficult.

“I don’t think the regulators necessarily knew what the impact was going to be, so we’re dealing with that on a daily basis,” Johnston said.

“We do a lot of liaising with the FMA and with specialist regulatory lawyers, accountants, etc. We’re really trying to demystify the process for our advisers. We can say to our members – ‘if we don’t know the answers, we’ve got a whole pool of professionals who we can go to.’”

“The compliance side has never been an issue for us, but what’s difficult is the ambiguity,” she added.

“We’ve got a great software system, and we’ve always had great training. But now it’ll be all about the education process for the advisers, and us having to tell them “we believe that this is what’s going to happen, but we just don’t know.”

Johnston says that for advisers, it’s simply not their core business to sit down and fill out forms, so Astute has taken on that responsibility while keeping their members informed every step of the say. Astute provides timelines and data to all of its members on a regular basis, the aim being to reassure them that the compliance side is being fully handled.

“We’re just rolling with the legislation at the moment, and doing the best we can with the information that we have,” she concluded.

“We’re also going directly to the FMA and to regulation lawyers with our plans, so we’re confident that we’re really getting quality feedback. We have to be certain that the advice we’re given is reliable, and that’s why we choose to engage with them – so I can comfortably tell our members what we’re doing, why we’re doing it, and who it’s supported by.”

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