[GRTV] CoFI presents new challenges for advisers: Manning
Wealthpoint chief executive Simon Manning says advisers face a new range of challenges from the new conduct rules the government is looking to implement. [READ ON]
Sunday, June 6th 2021, 7:38PM
Wealthpoint represents around 150 advisers and has managed the transition to FSLAA well however the new CoFI regulations are proving to be quite challenging.
"We have got a really diverse group of providers - almost 50 - that we're either contracted with or are in the process of contracting with and all of them are taking the CoFI requirements in different ways, reflecting in our agreements.
"It's led to some fairly onerous terms as far as we are concerned, there's not a lot of flexibility with the providers and a big workload for us because a lot of the new agreements around FSLAR were bringing in the CoFI requirements."
Manning says a couple of providers are asking for Wealthpoint to arrange and pay for yearly, independent advice process audits and at the other end of the spectrum others have remained fairly similar to what they had in place before.
"Some of them have been 50 to 60 pages long...it was something we learnt quite early on when we were setting up just how much work there was in setting up these arrangements."
Will the new conduct regulations have much impact on advisers?
"What we are hoping to do is have a single set that will suit all of the providers so we don't have to be doing specific things for specific providers.
"It's unavoidable there will be some disruption for them, there will be some inconvenience, as I said there's not a lot of flexibility from the providers."
Manning says life insurance providers have been the easiest to deal with to date.
What's happening in product categories?
"The lending market has caught people by surprise...and has been going incredibly strongly.
"In times of uncertainty people tend to want to hold onto insurance, look at covering risk and seek advice, which has been good."
Manning says the KiwiSaver shake out of default providers caught a lot of people by surprise and was quite a significant change.
"The default changes won't really affect what we do...but we also look at the process, the team, the company and things like that...not just fees.
"I think the numbers [moving providers or funds] will be less than what we think.
"But regardless, come November and December that's a big transaction that will be happening in the market."
And lastly, Manning speaks about the AXA/AMP buy-out 10 years ago with Wealthpoint forming out of the AMP Advisers Association.
"It probably hasn't worked out as either company would have thought...probably due to the complexity."
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