AFAs risk suspension

Authorised Financial Advisers who haven’t renewed their business statements on their anniversary risk being put out of business.

Tuesday, August 7th 2012, 7:28AM 4 Comments

The Financial Markets says that at the end of May, 719 AFAs were due to confirm that their adviser business statements are current. However so far 67 have failed to do so.

The FMA says that even if an AFA is no longer practising, or their circumstances have changed, they are still required to email FMA on the annual anniversary of their authorisation.

The FMA is working with the relevant AFAs to make sure they understand the consequences of failing to comply which include:

· Cancelling or suspending an AFAs authorisation

· Debarring an AFA from reapplying for authorisation for a specified period

· Amending the terms and conditions of an AFAs authorisation; and

· Issuing a written direction.

The FMA was unable to supply statistics for the end of June and July as these are still be compiled.

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Comments from our readers

On 7 August 2012 at 12:47 pm Barry Milner said:

Can someone please explain why on earth AFAs are required to have an "Adviser Business Statement", kept as a living document with such draconian penalties for failure to comply when this document is NOT available to the general public and forms no part of an adviser's disclosure documentation. What is the point?

On 7 August 2012 at 3:29 pm Amused said:

Simple Barry. To keep the regulators occupied with something to do :)

On 9 August 2012 at 11:10 am LPL said:

I'm wondering if the reason some advisers have not adhered this is because of the way it is notified. An alert needs to be just that. Perhaps the FMA could review how they send out notification.

On 16 August 2012 at 10:36 am Annoyed said:

Agree with @LPL on this one - how many advisers knew that they had to undertake 2 different annual confiramtions....maybe the FMA should look at winding the 'yes I have an ABS' into the annual FSPR confirmation. Would save all of this hassle...

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