[GRTV] New FAP regime creates opportunities for advisers

The creation of Financial Advice Providers (FAPs) has created a whole new set of opportunities for financial advisers.

Thursday, September 12th 2024, 6:00AM

Partners Life Head of Industry Engagement Mark Banicevich joins Philip Macalister on Good Returns TV to discuss how financial advice has changed under the (relatively) new adviser regime.

Banicevich says there are a whole new range of opportunities for advisers.

"I always joke that the retirement age for financial advisers is about 83." An adviser would build up a book to sell.

"You will either in as a financial adviser or you were out."

"But now that you've got a license, the only way you can, offer financial advice to the public is by operating under a license and a financial adviser all the way, there has to create a business that has all of these systems and processes documented to obtain a license or buy a business that has one, and that enables existing license holders to start thinking, well, maybe I don't have to leave entirely."

"Maybe I can step back and bring somebody in. They can buy shares in the business and I can mentor them. I can be a director on the board and not do the day to day I can manage. I can do so many different ways of stepping out of the business, rather than just saying, I'm in or I'm out."

Banicevich says the financial adviser regime which fully came into force in March last year has been good.

"It is absolutely possible to be a sole adviser in a business and manage well under this regime, which is people didn't think that was going to happen."

He says the Ministry of Business, Innovation and Employment did a good job in designing the regime.

Banicevich also has some interesting statistics (not all in the video). There were 3702 financial advisers deregistered since March 1, 2021, and 3165new advisers in that period meaning there was a net reduction of 537 advisers.

The three largest FAPs together engage 1968 financial advisers; there are 679 FAPs with 1 financial adviser and surprisingly 137 FAPs with no financial advisers.