Commissioner for Financial Advisers David Mayhew spoke at the New Zealand Mortgage Brokers Association (NZMBA) conference yesterday, saying the Commission only has power to authorise advisers for a specified period so there will be a requirement for AFAs to renew their licences.

"The actual term of the licence period is something that is being debated at the moment."

Mayhew says when AFAs come back for renewal the Commission has to be satisfied that the AFA has complied with all the regulatory obligations, whether it be the Act, the Code or the terms and conditions.

He says that raises a real challenge for the Commission on how it decides satisfaction is met.

"Is it if we haven't heard any customer complaints or if their professional association doesn't have any information to report to us?"

Or , Mayhew asks, is a more proactive approach required with a review of client files to see whether the AFA's advice reflects the process.

"That in turn raises the very interesting point, that any adviser would tell me that there is a certain amount of subjectivity in the advice process. It's an art of signs and there is more than one reasonable answer to any given advice situation. We understand that," he says.

Mayhew then asked if the Commission should instead be looking to go down the path of peer reviews and if so against which benchmarks and with who deciding what the right standards are?

These are all questions advisers are hoping they will have answers to soon as the year slips away with regulation drawing ever nearer and with uncertainty still abounding.

Mayhew says in the end it comes back to the role of industry working with the regulator to develop a partnership.