Newpark considers being a licensed dealer group

New financial adviser regulations may mean groups like Newpark may take responsibility for the advice its members give, but that will come at a cost.

Friday, August 25th 2017, 6:00AM

Managing director Darren Gannon says it’s too early to make final decisions, but looking at the legislation it is likely Newpark will become a licensed group.

“At a guess it is more than likely we would become a licensed dealer group.”

This means that it would be responsible for all its members and the advice they offer.

Under this model the group would, in all likelihood have a smaller number of members than it currently has.

Gannon says one of the big issues will be cost. Currently Newpark is fully-funded by the life companies.

It is unclear whether they would continue to fund groups in the future. If they didn’t then members would have to pay for the services the group provides.

He says they maybe prepared to fund groups if they take responsibility for their members.

“If you’re planning to be in the industry and to have a viable business plan for all outcomes including this one,” he says.

Our business it is to help advisers, he says.

“Advisers should be out talking to their customers, not sitting in their offices freaking out over what’s going on with regulation.”

Gannon says Newpark is well-positioned, partly because it has its own software system.

He says 400 people are using the system currently and there are around 110,000 client files on it.

The group employs four programmers to run the software.

As part of preparing for the future Newpark has made a number of board appointments and has also appointed a general manager to run the business.

Gannon says he will “take a minor step sideways” and focus on building the business and developing alliances and partnerships.

Tags: Darren Gannon Financial Services Legislation Amendment Bill Newpark