There has been a lot of concern independent advisers will not have the ability to meet the stricter compliance requirements that will come in to play for personalised and class DIMS providers on December 1.

Ben Brinkerhoff, of NZ Wealth, said it was the biggest issue for the industry at present.  “It’s putting a huge burden on individual advisers.”

He said independent operators would be forced into offering wrapped, prepackaged solutions. “You could have a very competent adviser who looks at the compliance burden and decides it’s not worth it. Most independent advisers will go in one of two directions, the solution for smaller clients will be a wrap, for bigger clients they’ll keep them non-DIMS and get them to sign off everything.”

One adviser, who has been working in the industry for 25 years but did not want to be identified, said he already planned to join a firm that would get a DIMS licence. “I’m not getting any younger.”

An FMA spokeswoman said the key message for advisers was that the bar was being raised. “But as long as advisers can meet these higher standards then they can continue to provide DIMS.”

She said the move was to help develop consumer confidence. “The higher standards are intended to build customer trust and confidence in competent service providers by excluding service providers that aren’t able to provide an effective service. “

Angus Dale-Jones, a board member of the PAA, said every adviser business would have to work out what the value they offered clients was.  “If it’s advice, you’re set up already with an AFA qualification. If it’s more like fund management, the market license is something you’re going to have to give serious consideration to.”

Deciding what their value proposition was would help advisers who were straddling both funds management and advice ,  he said. “It’s in everyone’s interest that consumers have access to good advice.”