Transitional licensing starts at the end of this year, and the new regime officially takes hold next June.

But adviser coach Tony Vidler said some advisers had been focusing on the wrong aspect as they prepared for it.

A new code of conduct will require level five-equivalent adviser competence for anyone who was not an AFA under the current rules.

But Vidler said, because there was a safe harbour of two years before advisers must meet the competence standard, many should have put their energy into honing their business processes, not scrambling to get qualifications.

The Financial Markets Authority has indicated that as part of transitional licensing, advice businesses will need to show immediately that they have good record-keeping and complaint management processes.

“A lot of advisers have thrown all their money, time and energy at the wrong aspect of getting through licensing.”

But Katrina Shanks, chief executive of Financial Advice NZ, said advisers should take an even further step back when considering their approach.

Advisers needed to understand where they would sit in the new licensing world, she said, because each step in the decision-making process would have implications on the next.

People would need to decide whether they wanted their own financial advice provider license, she said, and if so what liability they wanted to take – whether they were willing to take responsibility for any other advisers and staff or not.

The type of staff in the FAP would also affect what decisions needed to be made, she said, because qualified advisers would need fewer processes and controls than those who needed systems to backfill their qualifications.

"How do you want to operate in the future? How do you see the growth of your business, what does that look like? Is it that I take the liability in my own FAP or I grow my business inside someone else’s FAP. Lots of business decisions need to be made before even start considering regulatory decisions.”

She said all current RFAs would have record-keeping processes “to varying degrees”.

“I don’t think licensing is the problem.

“The transitional period allows financial advisers who have not decided a pathway to full licencing to have time to make the many decisions which are required. There are many advisers who are still uncertain as to which FAP they will belong and with time the FAP world will become clearer.”