Financial advisers told despite the changes don't delay
Now that financial advisers have certainty about the regulatory framework, it's up to them to meet the new standards in time to be authorised by 30 June 2011, says the Commissioner for Financial Advisers, David Mayhew.
Tuesday, June 29th 2010, 5:46AM
by Jenha White
He has also updated the Securities Commission financial adviser implementation timetable with modifications to allow time for late applications to register with the Companies Office.
Preferably registration is to be done by 1 December 2010, but late applications will be accepted until 31 March 2011.
Also in view of the new legislative rules, the Commission has relaxed the Qualifying Financial Entities (QFE) application timetable.
"I encourage QFEs to submit their Adviser Business Statement (ABS) by October, although we will accept them up to a final deadline of 1 December 2010."
Mayhew says the top priority for advisers seeking authorisation is to enrol to be assessed against the adviser competence standards which are currently being finalised by the Code Committee.
"I am confident that the proposed competence standards are unlikely to change materially and certainly will not be reduced. I'd encourage all would-be AFAs not to wait until the last minute before applying," Mayhew stresses.
He also notes that the regulations had yet to be made by the Ministry of Economic Development to confirm that the Commission could authorise an adviser to provide advice only on mortgage or insurance products.
The Code Committee has indicated that they are continuing to include competence standards for these advisers in the draft Code.
Mayhew says that approach is sensible and pragmatic, based on the assumption that the regulations will be published by the time the draft Code comes to be approved and made by the time the Code is implemented.
Commerce Minister Simon Power says in the event he allows regulations to be developed enabling the Commission to authorise people for solely providing category two services, the Code is likely to need to reflect appropriate standards for such advisers.
"The Commissioner for Financial Advisers has asked the Code Committee to specifically consult on the development of such standards, to cater for an eventuality that such regulations are developed."
Mayhew has also welcomed Parliament's decision to use the Code as a benchmark for firms and corporate groups seeking to become QFEs.
"The Code benchmark is a powerful consumer protection tool in the regulation of all advisers dealing with the investing public, including QFE advisers," he says.
QFEs must submit an ABS to the Commission before getting their licence to explain the policies and procedures they have in place to ensure their advisers operate professionally.
Mayhew says the Commission will scrutinise every ABS to ensure that the Code benchmark is appropriately applied.
Jenha is a TPL staff reporter. jenha@tarawera.co.nz
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