We have put together the top five things we think could shape the year for advisers and Financial Advice Providers (FAPs):

1. Increased regulatory oversight: If the FMA decide to flex its muscle and fully enforce the law then this will present a challenge for those not fully prepared. FAPs and advisers have had two years to prepare for 16 March and should already be operating in a fully compliant manner. 

     The key is to:

• Ensure the policies, processes and controls listed in the FAP licence application are in place, have been approved by the board, and that everyone is aware of and following them.
• You know what your regulatory duties are when providing financial advice but you must be able to prove you are meeting those duties.
• Make sure your disclosures are correct and provided at the right time.

2. Client challenges: For the past decade clients have had minimal grumbles but this is changing. Investment clients have seen falls in their investment value, mortgage interest rates have increased and the cost of insurance premiums are rising. This can lead to some clients asking why they are in a particular product, shopping around for lower cost alternatives or questioning the value of the advice they receive.

     The key is to:

• Proactively contact your clients and address potential issues before they make a decision without you.
• Be ready to reinforce why a client is in a particular product, and if they are no longer happy identify what has changed in their situation and address how to fix it.
• Build a stronger value proposition as to why a client should deal with you.

3. Product provider expectations: Insurers and banks will be getting ready for CoFI and will be starting to enforce the adviser and FAP obligations in their distribution agreements. They have the ability to stop paying commission if contract obligations are not met.

     The key is to:

• Meet compliance obligations.
• Service all clients.
• Ensure the products your clients are in are suitable for their needs and that they have a reasonable understanding of them.

4. Increased focus on Continuing Professional Development (CPD): All FAPs and those who provide financial advice must comply with Code Standard 9 relating to keeping competence, knowledge, and skill up to date. This places more obligations and work on the FAP and its advisers.

     The key is to:

• Embrace the CPD handbook published by Strategi Institute (coming to your inbox late January 2023).
• Have a plan for the training to be provided and how you will track it.
• Have the right training delivery solution to make CPD as easy as possible to access and complete.

5. Recruiting new advisers and upskilling existing advisers: Finding new advisers and getting them through the New Zealand Certificate in Financial Services (Level 5) version 2 as quickly as possible can be a challenge. Upskilling existing advisers so they have more than one specialist strand (enabling them to provide a broadened scope of advice) can take time and meet some adviser resistance. Those who provide financial advice need to hold the relevant specialist strand otherwise they cannot provide that advice post 16 March 2023.

Talk to Strategi Institute about:

• For new advisers – the fast-track internship programme to speed up obtaining the level 5 qualification and how to obtain discounted pricing Strategi Institute can provide via government funding.
• For existing advisers – the study options for the specialist strands and how Strategi Institute can support your advisers through the process.

Our team is back on board and ready to assist you so don’t hesitate to contact us with any questions.