The review of the Financial Advisers Act is in its final stages.

Soon, advisers will fall under the Financial Markets Conduct Act, will all have to work for licensed entities and will be bound by a code of conduct and disclosure requirements.

Many of the details of the regime are yet to be worked out and will not be evident until the new code is revealed.

That includes things such as the qualifications that will be required for advisers.

But Michael Dowling, president of the IFA, said it was likely that people currently working as registered financial advisers would drop out.

He said the Australian experience, and that of New Zealand when the Financial Advisers Act was first introduced, would indicate that 20% to 50% of RFAs might decide not to make the transition.

That would be a problem if they were not replaced swiftly, he said.

"It's difficult to get the level of experience, let alone get them into a new qualification."

Graeme Edwards, AIA's acting chief executive, said there could be a drop in headline RFA numbers but that might not reduce the head count at the front line.

“I expect that will reflect those that focus on investment or mortgages and sell the odd policy deciding to focus just on their core business and refer those leads out. The advisers that are currently actively writing insurance will adapt and continue to prosper so I don’t foresee a significant drop the ‘active’ adviser numbers.”

Regulation expert Angus Dale-Jones said there was an opportunity to improve people's view of the industry and encourage new recruits in, "in a competitive way so advisers compete with other careers as something people aspire to do".
 

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