Proposed changes for the Financial Advisers Act were revealed last week, and include a new approach to licensing advice businesses and adviser compliance – although the details of this are yet to be ironed out.

Sue Brown, of law firm DLA Piper, was previously head of primary regulatory operations at the Financial Markets Authority. She praised the reforms suggested, in particular the removal of distinctions between category one and two products, class and personalised advice, and the various acronyms that had divided the adviser population.

“The proposal represents a giant step forward on the current regime with its complexities, distinctions and acronyms.”

But she said the industry had spent a lot of time and hundreds of thousands of dollars knocking itself into line with the current regime and she had concerns about how quickly it would be required to meet new rules.

“The thing that concerns me for advisers and particularly smaller operators is that they just shaped their businesses to meet the regime as they had it and now they have to do it again.”

She said it would be important that there was an adequate transition period and support from FMA and MBIE for advice businesses going through the process. She hoped the requirements would not mean too much time away from advisers' core business - time spent on adjusting the business from a regulatory perspective would mean money lost for those firms, she said.

“Every minute a financial adviser is not providing advice they are not earning money.”

The timeline is yet to be finalised but more details are expected in the next two months.

More details are also yet to come out about planned changes to the Financial Advisers Disciplinary Committee (FADC).

Although the FADC has been operating for six years, it has only dealt with a handful of cases. Brown said it had been a total failure.  She said, over the same period the FADC had been in operation, its equivalent for real estate agents had heard hundreds of cases and had dealt with issues quickly.

The FADC should be a tool to help advisers understand what was expected of them, she said, rather than performing a purely judicial function. “It could give real guidance to advisers rather than wait for litigation or serious failures.”