Why Dealer Group QFEs isn't a far-fetched idea

Firstly credit to Jeff Page for raising the idea that dealer groups like Kepa could become some form of QFE. I thought he was brave to air the idea. 

Funnily enough one of the biggest things which got readers going was his comment about wayward advisers, which he has since apologised for making. In his defence I don't think he was referring to members of Kepa with this comment.

But the idea of "wayward" registered financial advisers is part of the reason why this QFE idea may have some legs. Let me explain why this idea isn't as far-fetched as some seem to think.

The Financial Markets Authority is charged with monitoring and regulating advisers. Out of the universe of however many thousands of advisers there are in New Zealand it actively monitors the 1,800 Authorised Financial Advisers. A large proportion of RFAs sit inside QFEs. These QFEs are essentially delegated to do the FMA's monitoring work. The FMA monitors QFEs but it is hard to know what happens here there is little publicly available evidence of what this monitoring uncovers. Then there are the remainder of the RFA universe who pretty much escape any form of monitoring.