He has already had one meeting with the regulator about the regulatory reporting guidelines and is to meet them again early next month.

Tate said he used his recent meeting to “strongly articulate” concerns about the breadth of information being requested in the new reporting requirements. The FMA is planning to make it compulsory for all AFAs to produce an annual report, called an Information Return, each year. AFAs would have to complete the first return relating to their business as at June 30 by September 30. After that, they will have to submit a return each year.

In response, the FMA had agreed to have various industry groups attend a workshop to determine what was appropriate and what would add value, he said.

Issues around the completion of the annual information return were compounded by the other requirements placed on advisers, he said. There is the AML annual report as well as the process of renewing licenses each year, and new regulations looming for DIMS providers.
Tate said a large amount of the regulatory requirements could be wrapped up into one report.

He said it did not make sense that for AML purposes, advisers had to submit a report on years when they were also audited.  “It’s the same year, the same period, the same things. I’m trying to draft a list of all the compliance imports on advisers and the time involved in complying and the cost to give them an overall list of things that now have to be completed. How many have a direct benefit to consumers?”

Regulatory creep would probably drive out the 1900 AFAs left in the market, he said. “It can’t be good for consumers in terms of getting good, unbiased advice. The objectives of the Financial Advisers Act don’t seem to be being met as effectively as they should be. It was about the efficient delivery of appropriate advice. It’s not efficient any more. We need to be strong on it with the FMA.”