Adviser consultancy firms say full licensing provisions bring mandate for change

Steve Burgess

Compliance advisory firms are working hard to help bring advisers up to the standards set by the full licensing provisions released by the FMA last week. Good Returns spoke to representatives of two leading compliance consultancy firms to see what issues were most pressing for advisers looking to meet the standards of the new regime.

Steve Burgess from Compliance Refinery said the biggest thing that the full licence conditions offer advisers is certainty. “A large part of the industry has been slow to progress primarily because they have been saying ‘we don't know everything yet’. I think now that the industry has total certainty that we will start to see some real change.”

Burgess believes that it is not only the regulators that advisers will have to form new relationships with, but also the product providers. “As much as the FMA says, ‘these are the standards you have to meet’, whatever is in their product provider agency agreements those advisers are going to have to adhere to as well. In any business you have to have a good relationship with your key counterparts, in this industry those relationships are changing.”

“The main issue is if you don’t meet the FAP requirements you may find yourself without a FAP licence, but even if you aren’t struck off the FSPR the product provider may terminate an agency agreement if they don’t think you are meeting the standards.”