IFA slams ‘nanny state’ attitude to advisers

Further to Nigel's comments, the Institute strongly lobbied the government against this provision as part of our usual submissions and lobbying we do on any new proposed act or regulation. We told them last year of of the unintended consequences of this part of the Bill, and are disappointed to see our strong advice has not been heeded. Needless to say we will keep pressing them.

More bank friendly legislation from government and it wont end here, you only have to talk to an adviser in the UK to realise this is the thin end of a very large wedge. How on earth does a "newbie" get started and learn his/her craft if forbidden from making cold calls, after all not everyone can afford to buy client base at the start of their career.
Adviser numbers in the UK, I am told,have fallen by about 80% over the last five to ten years and if things keep going the way they are we can expect something similar here. Successive governments have told us that New Zealand is underinsured, but this sort of legislation wont fix that problem, for heavens sake why can't they put aside their anti salesman prejudice and apply some common sense to the issue.

A little bit too much regulation now. Time for the FMA to ease off here.

Yet more evidence that the authorities don't understand our business. Someone should tell them our business revolves around relationships ( that's people meeting people) and the concept of super slick salesmen talking people into something they didn't want faded into obscurity at least 20 years ago.

You guys think they really care what we say or suggest? It's been more than 2 years of contributions from advisers, and they haven't listened, would they now? So what suggestions came from IFA, LBA, PAA, ABC or XYZ. Regardless of what's going to happen to advisers, and however the regulations may turn the industry into, these chaps will still get paid anyway, and they bear no financial responsibilities whatsoever to anybody, so why bother? Have they ever summarised contributions made by advisers and compared it with their ideas, point for point, and debate or discuss with us over them? If there was ever one, then I apologise, I missed it. If not, then I can only conclude, their mind have already been made up, even before advisers were even able to say their first word.

I personally strongly support the views that Nigel Tate has expressed here, and wish to take the opportunity to remind all readers (all advisers) of their own opportunity to make a difference.

During the long and protracted business of seeing the Financial Advisers Act (and the associated Code of Professional Conduct) come to fruition, there was extensive consultation with industry, and significant opportunity for affected parties - and that includes individual financial advisers - to make submissions. The very wording adopted in numerous places throughout the Code, and the revision and amendment of some key areas in the FAA, reflected that sensible and thoughtful comment from the industry was given credence. One could, and should, expect that the same attitude would be adopted by rule-makers here too. That is, sensible and thoughtful submissions from large numbers of the affected industry would be given credence. The result of that of course was to have far more workable legislation and regulation than had otherwise been proposed.

However, far too often when proposed legislation is being discussed the affected industry parties ignore their chance to be heard. Instead of making the effort to direct their concerns to the rule-makers, the effort is directed at pointless venting - often within the industry and aimed at those actually trying to make the difference.

I'd love a dollar for every comment posted in a blog berating the IFA, or the NZMBA, or some other industry organisation for not doing enough to have the rules changed on behalf of all advisers. Ironically, many of the criticisms directed at any of the organisations are often from advisers who are not even members of those organisations - yet they still perceive somehow that an organisation that they choose to not belong to will somehow protect their individual interests.

Note that I am not advocating for any particular organisation here either. Belonging to anything is better than belonging to nothing. When it comes to critical issues within the industry the various organisations have worked well together for the benefit of the entire industry.

The simple - and perhaps unpalatable fact to many advisers - is that any industry organisations ability to thoughtfully influence the operating environment is largely dependent upon the strength of the organisations membership and values, together with their ability to work cohesively and professionally with other industry parties.

Put bluntly; if an adviser wants to see a different future, then the adviser should get involved in making that happen by joining their peers and contributing. If an adviser can't do that, then in my own view they have abrogated their right to whinge about the outcomes. That is especially true when whingeing anonymously - that is just hot air. Absolutely no weight at all would be placed upon comments from unknown parties when considering any review of legislation.

There is however weight in numbers, and there is significance in size. There are benefits from collaborating on common ground issues for members of any industry.

Unfortunately I have long felt that as an industry we have missed several golden opportunities to have significant influence in the shape of our industry through lack of collaboration and common vision within the advisory community.

If we have another impending piece of legislation that, as an industry, we firmly believe is flawed in some critical areas, then take the opportunity to act. Rather than castigate industry organisations for being ineffective, help make them effective by belonging to them and contributing to them.

Professional advisers who care about how their industry will look and work CAN make a difference by working together and providing logical, rational and effective submissions to the right parties.

At the very least however, individual advisers can invest a little time and effort in their chosen vocation by submitting sensible and rational suggestions to the law-makers directly.

Tony Vidler
(entirely personal opinion only, which has been brewing for at least 3 years.....all irate responses can be directed to Strictly Business Ltd)

I do not think for once that good professional advisers are against any regulations, in fact, on the contrary, they are all for regulations to weed out the unscrupulous ones. And I believe all are for some regulations to govern the industry. But I think some missed the point - the point is the way the regulation was written, advisers are interpreting it differently, there are more than one legal opinion, and finally, biggest joke, when you ask the regulatory body to for clarifications, the response? You are advice to seek legal advice. They can't or won't clarify, how is that of any help to the industry???

I've said this before, and I'll say it again:
A badly written regulation: no two advisers can agree on what it meant or want, and there are more than two legal opinions.
A well written regulation: Any average man will understand it after reading it (eg. the road code), whether one agrees with it or not, is irrelevant.

And what annoys a lot of advisers was the amount of tax-payers money that has been wasted by the people who were suppose to come up with some decent regulations, and the amount of money advisers have to spend. Some don't even know whether it should have been spent (actually some don't have, but already have spent them) to comply. So, whose fault was it? Nobody I suppose.

The argument that collectively having all advisers signed up as paid members of industry associations will somehow change the future decision making processes of banks, insurers or law makers is a naïve one.

Corporates make their business decisions based solely on the best financial outcome for themselves or shareholders and politicians will always try to pander to as many people as possible to remain popular when enacting legislation. The often banded about phrase by industry associations of “one strong industry voice” sounds great but in reality it’s not worth diddly squat as many advisers with experience have learnt…

Dealer groups offer their members far more collective bargaining power on the subject of commissions or product enhancements from providers nowadays than industry associations could ever hope to and it’s for this reason that many advisers are not renewing association memberships i.e. lack of value for money.

If this sounds like another comment berating industry associations it’s not meant to be. Many do a good job improving educational standards amongst newer advisers. However the reality is that experienced advisers expect (and rightly so) to see a measurable return on the money they pay each year to belong. For many of us our dealer groups with the money they have invested in technology do a much better job at educating new and experienced advisers plus keeping us all compliant. Industry associations need then to define for themselves a clear role if they are to have a sustainable future going forward.