Change is on the horizon, and for small adviser businesses choosing to become a Financial Advice Provider (FAP), that’s going to mean a significant amount of extra work and potentially changing the way you run your operations. But according to one financial adviser, those who can see this as an advantage to their business will come out significantly better on the other side.
According to Leecia Burford, founder of Leecia Burford Financial Services, compliance shouldn’t be a document that you sign off on and then go about your business as normal. She says the new compliance regime is something that she is personally looking forward to, as it will help raise the profile of financial advisers and place them on a higher tier of trustworthiness with clients.
“I was educated on the industry by my sister, but back when she first did it, you wrote everything compliance-related onto one piece of paper, and that was it,” Burford explained.
“In 2020 we’re going to have to become registered Financial Advice Providers, and everyone is a bit nervous because we all want to be doing the right thing. None of us want to mess this up.”
“We’ve got a lot of work to do over the next year to get compliant,” she continued. “The issue for a lot of advisers is that they have their processes more or less correct, but now they’ve got to document them and demonstrate that to the regulators. Personally, I love the fact that this is what I have to do – and I do it. I have to be compliant to do my job, and that makes me better and makes my clients happier.”
Burford says that although the majority of the industry does right by its clients, the changes should weed out some cowboys and prevent certain situations from happening – for example, a client getting an insurance policy that they are never going to be able to claim on.
“It’s embarrassing, because those situations do happen,” Burford said. “So while it is certainly a challenge, it’s fantastic for the industry, and if it means that more New Zealanders will be covered, then that’s great.”
“I hope that in the next couple of years, compliance isn’t going to be something that we sign and pay money for and nothing changes,” she concluded.
“If every broker does a better job, then the whole industry gets lifted up. That’s what I’m really hoping for – to leave the ‘used car salesman with the bad tie’ category, and to get up there with the lawyers and accountants, and to prove that we’re really worth our weight in gold.”