Confidence in regulation helping businesses to grow
Two-thirds of financial advisers believe that regulation provides an opportunity to grow their businesses according to a survey of the Professional Advisers Association (PAA).
Thursday, April 15th 2010, 10:29PM
by Jenha White
PAA chief executive Edward Richards says he believes the survey, completed by around 250 of its members, had such a positive response because advisers realise that regulation is helping to provide a professional image for businesses which will help to give people confidence in the system.
"Prior to this some of the public had a perception, fair or not, that advisers were an unregulated bunch with no standards and now advisers have the ability to achieve best practice over and above regulatory requirements."
The Financial Advisers Act 2008 requires financial advisers to be competent, and to be accountable for the advice they give and some advisers must comply with a Code of Conduct.
The law requires disclosure by financial advisers so investors and consumers can make informed decisions about whether to use their services and follow their advice. The Act is expected to be operational from December 2010.
Richards says advisers are not avoiding or resisting compliance with regulation anymore and they just want the tools to get on with it, otherwise, they are technically out of business.
Another outcome of the survey was that many advisers acknowledged that they need to work on their advice process to make it more streamlined and process driven.
Richards says most advisers are successful with the relationship side of their businesses which is the soft data and that's going to remain as important as ever.
"However, from now on, as soon as advisers give advice they need to record their conversations and what people are wanting with the six step process."
He says advisers are good at goal orientation and targets but now the detail will also be extremely important and the process by which advisers get results is critical.
Jenha is a TPL staff reporter. jenha@tarawera.co.nz
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