DIMS advisers face uncertainty... again
He's only been approved to offer personalised DIMS for just over two years, now adviser Alistair Bean faces more uncertainty.
Wednesday, November 29th 2017, 6:00AM
Bean and the handful of advisers like him face more changes as the Financial Services Legislation Amendment Bill repeals the Financial Advisers Act.
At the moment, personalised DIMS is still offered under the FAA while class DIMS is already under the Financial Markets Conduct Act.
The Financial Services Legislation Amendment Bill will consolidate both under the FMCA. The bill enables existing personalised DIMS providers to be automatically granted licenses, subject to conditions. It is yet to be determined how those advisers' licensing requirements will be dealt with in relation to their need to offer financial advice services, as well.
Bean said he had decided it was not worth losing sleep over the changes this time around.
But he said it was unsettling to be going through more changes in what was still a relatively new regime.
He had found a “market niche” and the authorisation he was granted in 2015 enabled him to operate his business in exactly the way he wanted to.
“It allows me to treat an individual as an individual and the performance for my clients has really taken off.”
He said they were able to get a better result than if they were in a class situation, as one of a number.
Many clients had been able to hang on to their shares in A2 Milk, riding the increase from 49c per share to $8,50 – instead of in a typical class situation where a computer algorithm might kick in and sell the shares when they made a 40% gain.
“Depending on their individual situation, some have made 300%, 400%, 500%.”
But Bean said it was frustrating not having a clear picture of how the regulatory expectations for his business would change under the new iteration of financial adviser law.
“Once they tell us what the final outcome is going to be I’ll make some decisions."
MinterEllisonRuddWatts senior solicitor Maria Collett-Bevan said DIMS had been launched into good health by the previous round of FMCA changes.
The licensing of class DIMS providers had meant greater regulatory scrutiny, ongoing reporting requirements and improved disclosure.
She said the FMCA had “reinvigorated DIMS” by improving the regulatory framework.
“While MIS will continue to fulfill the requirement for investors wanting to pool their funds with other investors to access a more diverse investment mix, we expect that increasingly, New Zealanders will be looking at DIMS as a strong, alternative investment option.”The bill enables existing personalised DIMS providers to be automatically granted licenses, subject to conditions."
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