‘Spring cleaning on steroids’ for March 15

Compliance professionals are reporting “a frenzy of activity” as advisers get organised for the regulation change on Monday.

Thursday, March 11th 2021, 3:56PM

by Daniel Smith

Karty Mayne

Karty Mayne, director of Rosewill Consulting says that the past few weeks have been like “spring cleaning on steroids”.

Mayne has been flat out helping advisers get ready for the new regime.

“The last few weeks have really been high activity. We have seen more advisers engaging than ever before which has been really good. Some advisers have been busy because financial services in general have been busy. Some of them that haven’t gotten themselves organised [it is because they] have just been so busy with servicing their clients.”

She adds that “Finding advisers who aren’t across the line is starting to become rare. It is around one in 50. But really at the moment it is what I would call a frenzy of activity.”

Mayne calls this frenzy “peripheral pressures that are a by-product of going through a new regime”.

“There is so much change. All the product providers want new agreements. All the licensees want new agreements. There are changes within companies in terms of which FAPs they go under.”

But for Mayne there are two ways to view the situation, either become swamped under the pressure, or look at it “as a really good opportunity to update everything”.

“A lot of advisers are using out of date terms of engagement, there are things in many contracts that do not apply anymore or are unenforceable under the law, product provider lists are out of date.”

But Mayne firmly believes that Monday March 15 is not going to be the end of the world for advisers.

“I look at it like Y2K. We were all afraid that the world was going to stop, but actually business will go on. While we don’t want anyone to have a get out of jail free card if they didn’t get ready, there is going to be a little leeway. If someone's website couldn’t be updated in time, you might need to use a manual process for a while. Advisers will do their best.

“I see it is a matter of just taking stock and being sensible. No one is going to shut the door on advisers who are only 70/80% there. Do everything you can to be compliant. But if there are things you need to finish off, then continue to finish them as quickly and efficiently as you can.”

Steven Burgess, director at the Compliance Refinery also says “I don’t see March 15 as a doomsday at all.”

Though Burgess admits that those advisers who have only engaged in change in recent weeks are well behind, “It doesn’t mean that the bulk of the industry hasn’t been prepared for this for some time. I think a lot of large and small businesses have progressed nicely and put themselves in a good position moving forward.”

It is difficult to make a broad claim about preparedness for Monday, Burgess says, because, “The industry is broken into different groupings. The investment side of the industry is actually in quite a good spot, because they were the most prepared going in. The general insurance side have an entirely different experience so they have the furthest to go.

“But overall there are many businesses who have built excellent processes moving forward.”

Burgess adds “I don’t think there is going to be much immediate change. Advisers are still going to be calling clients, product providers are still going to be receiving applications. In terms of March 15 being this massive day that is going to shake the industry, I really don’t see it.”

Daniel Relf, CEO of Strategi Group has said that, "The readiness of financial advisers has two sides with many more in the middle."

"On one hand, there are those that understand the new obligations and have invested time and other resources to be ready for 15 March. On the other hand, there are many who have taken a relaxed attitude and possibly had confusion with the two-year safe harbour to obtain their full FAP licence and demonstrate competence, knowledge and skill to also mistakenly apply this timeframe to become compliant. There are many more who have been distracted by both the disruption of the last twelve months and an unprecedented level of new clients and demand for adviser services which has resulted in advisers being too busy and not devoting enough resources to get ready."

Tags: compliance Compliance Refinery Karty Mayne regulation Rosewill Consulting Steve Burgess