The top three misconceptions about 15 March
The top three misconceptions about 15 March
15 MAR 2021
A quick trawl through the questions and comments we’ve received since the beginning of the year has revealed some concerning trends. All show a lack of detailed understanding of the new advice regime taking effect from 15 March. This is particularly alarming considering the huge amount of work undertaken by the Financial Markets Authority, the Financial Services Council, networks, large advisory businesses and product providers to ensure that businesses and advisers are ready for the go-live date of 15 March 2021. The queries we have received through our various communication portals - including emails, calls, chat bot, course questions and meetings - highlight three common misconceptions.
Misconception 1: We’ve got two years to meet the new obligations
Wrong. All those providing financial advice will need to be compliant with the new legislation, disclosure regulations, code, conduct obligations, transitional Financial Advice Provider (FAP) standard conditions and product provider obligations as of 15 March 2021. The two-year transition period does not apply to meeting these obligations.
The two-year safe harbour period pertains to meeting the competency standards in the Code of Professional Conduct for Financial Advice Services only.
It is imperative you understand what the new obligations are and how to meet them. The Strategi Institute Closing the Gaps course is designed to help financial advisers understand the applicable legislation, regulation and codes, as well as helping to prove competence, knowledge, and skill to operate in the new advice regime.
This course includes an electronic copy of the ‘Regulatory guide for the financial services industry Edition 5’, (a hard copy version is also available). This becomes your regulatory bible which you can use daily as you get to grips with the new regime.
Misconception 2: Disclosure obligations aren’t changing much
Nope. The reality is the new disclosure regulations are quite different to the disclosure statements used today. Understanding how to practically draft new disclosure documentation is proving to be difficult for many and will potentially require some changes to websites and advice documentation. Our Disclosure guidance note provides an outline of what is required. Meanwhile, our FAP manual clients, and those on our monthly compliance service, will soon receive some templates to help make this process easier.
Misconception 3: I’m experienced, so I’ve got at least two years to upskill
Wrong again. The new regime is radically different, so everyone providing regulated financial advice from 15 March 2021 will have much to learn, regardless of their experience level.
Standard 9 of the Code of Professional Conduct for financial advice services requires FAPs and financial advisers to annually review and plan their continuing professional development. This is where professional development plans (PDPs) come to the fore. They highlight gaps in competence, knowledge, and skill and outline what training is needed. PDPs are becoming a vital tool for navigating the new advice regime in a compliant manner.
Our guidance note Developing your 2021 Professional Development Plan outlines why such a plan is necessary, who needs to have one, and provides tips on what should be included. For Strategi RADAR, compliance and FAP clients, a template with suggested continuing professional development modules and courses is provided. For non-clients, a copy can be purchased for only $60 plus GST.