Entity, instead of individual, licensing is one of the changes that has been proposed in the Ministry of Business, Innovation and Employment options paper on the Financial Advisers Act review.

Some commentators have said it could help regulate a larger number of advisers, if changes bring advisers who are not currently authorised under more regulatory scrutiny.

Fidelity Life chief executive Milton Jennings said the suggestion risked killing off advice. “It hasn’t been that successful in Australia.”

He said the smaller entities tended to be bought by institutions. “We are a country of small businesses, to have this personalised advice from small practices is critically important. I’d like to see that continue and try to grow it.”

He said entity licensing was all about consolidation. “We’ve seen a lot of consolidation over the last 10 years, it continues to happen, the big swallow up the small firms because they want the economies of scale. Organisations like Advice First, Camelot, Lifetime, they’re out there buying up agencies.”

Big firms were sometimes the only operators with the funding to buy companies that had accumulated books with strong renewal bases, he said.

“The big organisations have the funding lines and take them out but that’s a risk for providers because your distribution is sometimes being bought by the competition.”

Jennings said he had made a submission to that effect to the Financial Advisers Act review.