Mint Asset management head of sales and marketing, David Boyle, says there would be some advisers who did not want to move into a tough new regulatory environment. Many were in the later years of their working life and would think now was a good time to move on or sell their client book or just do something else.

It was not that the regulatory regime was too onerous, it was that some advisers, such as small, one-man-bands, would find it hard to comply with new requirements for a full Financial Advice Provider, or FAP, licence.

"They may not have the qualifications – the Level Five plus – and the cost in terms of time and money is for some, probably just too much.”

Boyle's warnings came in the wake of a report in mid February that one in five brokers had sought or were considering seeking medical help because of stress.

In addition, one in four were thinking of leaving the industry for the same reason.

Other brokers have complained that the Credit Contracts and Consumer Finance Act (CCCFA) have loaded them with expensive and time consuming paperwork for no real gain.
But Boyle thought getting the full FAP licence would be the main challenge.

The Financial Markets Authority (FMA) had been bringing in this since May 2021 and the process was due to finish later this year.

Some brokers would decide the game was not worth the candle.

So, would new talent come in to replace the old?

“I think that is a problem we have been struggling with as an industry for quite a while, and that is attracting new people as a vocation, something they would think about doing as a career.

“But I am hoping there will be new people coming after the change, possibly from the insurance or mortgage background, who will think, 'here is an opportunity'.

“This will happen over the next five years after the regulations have settled in.”

In another part of his webinar, Boyle warned of a constricting environment for giving financial advice.

“My fear is that you have an environment where everyone gives the same advice for everyone and that shouldn't be the case, because everyone's circumstances are different.

“I used the term, ‘homogenised advice' or having a ‘cookie cutter approach’, where 'this is how you do it for everyone'.

“That is certainly not the intent of the legislation, but people could think, oh well, I will just come up with five or six balanced portfolios of risk.

“That could work for a lot of people, but I think the real face to face advice needs to be personalised and take into account people's particular circumstances.”