[The Wrap] You can feel the change. But is it good?
It's hard to quantify, but you can just feel the change going on amongst financial advisers now the new legislation is in place.
Monday, May 10th 2021, 7:01PM 
14 Comments
Barely a day goes by now with signs that the financial advice world is changing - and changing significantly.
When the Financial Services Legislation Amendment Act finally came into force on March 15, advice, for all intents and purposes looked the same.
In the two months since then much has changed and many advisers have decided it is time to hang up their shingle. Two good examples in the life insurance world are Graeme Lindsay and Warren Duff. Between them there is more than 100 years experience.
While they are two we have reported on, emails come to us from advisers thanking us for the news and information on Good Returns and the quality of ASSET and TMM magazines.
These messages invariably say that it's farewell time. For most it is compliance which has driven their decision.
We've also heard, but have been unable to get the hard data, that many life insurance companies had to turn off their accreditation for hundreds of advisers who had not entered into the new regime either under a transitional licence or someone else's Financial Advice Provider licence.
Sources within some of the companies have confirmed there is an exodus happening and companies are spending time on managing transfer of books of business to other advisers.
It's sad to see all these people leave and the invariable question is where are the new advisers going to come from to replace these people? After all one of the aims of FSLAA was to make advice more accessible for all New Zealanders.
Partners Life managing director Naomi Ballantyne made some interesting comments in her most recent appearance on Good Returns TV. The company has lost four business development managers and they are all becoming advisers.
There is talk that more people are leaving banks to become advisers, but there are not sufficient people filling the ranks of financial advice. Overall there is net loss to the industry.
And if there is not enough capacity amongst the industry to pick up some of these books then maybe life companies will end up providing more advice to clients. That sort of feels like a 21st century version of tied agents.
There is of course an upside. Now may well be a good time for people, not afraid of compliance, to enter the advice world. We all know that good advisers can earn considerable income (just look at some of the cars when there is an industry event on).
But in the here and now the regulations have seemingly failed in their goal of making advice more accessible to New Zealanders. Maybe that is only a short term situation. Time will tell.
| « Estate planning course launches | Mann on a mission to diversify financial advice » |
Special Offers
Comments from our readers
At one end of the continuum are relatively proactive, well prepared, more professional small players. Most of these have been preparing for the new regime for years – and are ready to take advantage of the growth opportunities the new era will undoubtedly bring. They have little to fear.
At the other end are the largely reactive, less professional small players, who tend to be resistant to change, have tended to rely on a “wait and see” approach. Most of these will have to go – either out of the industry, or into larger (slightly larger or much larger) entities who can provide the support they will need – in exchange for somewhat limited prospects, and less professional freedom.
My guess is that about 20% of small players will be in this second group, and that over the next few years some of them will depart while others move into first group firms – contributing to healthy growth in this group; and to relatively static existing larger entities – and that the new environment will support the development of new business models to fill the gaps and perhaps see financial advice reach some currently unserved sectors.
To me what is currently missing is the business development support, sales training, lead generation, the motivational meetings and development days that were regular events in my calendar. I use to attend monthly study groups and even a top adviser forum that provided me with plenty ideas, support, fun and motivation at times when I will admit it was needed.
The peer to peer events for me is what’s missing, driven by the Kepa and Newpark’s of this world who have been cut down and dismissed, yet supported close to 1000 advisers in N.Z. The leadership in the adviser market is missing.
Override (Fapo?) is not being reinvested by advisers, who in most part are using this as a pay rise and still asking the market for free support. Provider production is down, cause no one is now driving sales with everyone’s focus on back office or compliance support, needed, but so is the other support… now missing, and the price is becoming obvious, and yes, I used the word “sales” and no, I don’t apologise.
As for the rest of the debate I don't think it matters much whether you go solo FAP, join a FAP or somewhere in between - we have to get our systems, processes and educational requirements sorted either way...
They've moved on, and they commented rarely if at all here and not for a very long time.
I hope they're enjoying the fruits of their labours over the years, they helped get most of us here regardless of being part of their groups or not.
Change is here, it's been signalled for over a decade and a financial crisis and a pandemic haven't stopped it. We can gnash our teeth about it, or get on with it.
Chewing on dry mouldy cheese or chasing the new stuff is everyone's personal choice. The reality is the cheese has moved.
@backstage and @Adviser1 you're only embarrassing yourselves by denigrating something that other Advisers find of value, and in turn the value they have provided to their clients.
The Adviser community looks forward to hearing about what you will contribute to assist Advisers that do not have the benefit of 10 years experience.
The key point from the dialogue above is the requirement for industry participants to have a regular forum(s) whereby they can exchange war-stories with peers. I would have thought that the industry associations are well placed to deliver these events - albeit that they have limited gatherings to regional or opted for less-effective technology connections. I'd encourage industry folks to support the (bi)annual events - not to listen to industry experts but moreso to hear what is working/not working amongst their peers.
When I was a newbie in the business, 7 Years ago, my dealer group helped the understanding the psyche of this industry. I believe learning from your peers in a group is the best way to learn - New adviser are not going to have this going forward - a shame really.
FANZ sometimes gets a lot of smack talk on here, from folks with ideas of what they SHOULD be doing [screaming from a soap box at "the regulators"] .... this is something they do do. When your area has a thing on, try turning up.
Sign In to add your comment
|
|
Printable version |
|
Email to a friend |
