Why advisers shouldn’t be scared of assurance and audits

by Ksenia Stepanova21 Jul 2021

As advisers get to grips with operating within the requirements of the new regime, one insurance and mortgage distribution group is urging them to embrace the audit and assurance process - something it says is going to be ‘crucial’ to keeping advisers safe.

Commenting on the need for a strong assurance process, New Zealand Financial Services Group (NZFSG) director Brian Greer said that one of the key challenges of the new regime is its “non-prescriptive” approach. As a result, many advisers have been left to figure out how to adequately prove their compliance for themselves, and Greer said that a solid assurance and audit process is a key part of achieving this in a way that satisfies the regulators.

“We’re in transitional licensing stage at the moment, and that’s been a really interesting and challenging journey,” Greer said.

Read more: Astute New Zealand launches mentor programme for advisers

“I really like where we’re at now, and I think it’s going to be the change between us being an industry and a profession. But while we absolutely applaud the regulatory bodies for providing a two-year transitional period to get to where we need to be, there hasn’t been a prescribed process that advisers need to follow. You’re almost trying to find your own way.”

“A lot of your process has to be automated to a degree, so that you can then run an assurance programme, and I think that’s going to be critical over the next 24 months,” Greer explained.

“No matter who you’re operating under, or whichever group you’re part of, it’s going to be vital to have a really strong assurance programme. You need to make sure that as we find our way through this new environment, that we are ticking the boxes and making sure we’re doing the things that we’re required to do - and of course, we’re going to learn as we go.”

Greer said that when the new regime kicked in, NZFSG spoke to its advisers to reassure them about the assurance and audit process. He said that it is ultimately there to help advisers learn rather than to penalise them, and the two-year safe harbour period allows for some breathing space to get things right.

Read more: Does your brokerage have a “repeatable” online process?

“We sat all our advisers down and said: ‘don’t be scared of the assurance programme, or of any audit process - it’s there to keep you safe, and it’s there to help you learn’,” Greer said.

“We think we know the answers, but we’ve already seen that what we think is a safe process may need some tweaking when it comes to working practically with your clients. That’s what the next couple of years are going to be all about.”

“My advice to advisers is to embrace the new environment, and embrace audit and assurance checks,” he added.

“They’re there to help you learn, and we’ve actually got a two-year period to get to where we need to be. So we’re all safe, and we’re all giving our clients the right advice through the right processes.”

Most Read

NZ Adviser TV