CEO said the industry would not have entered the regime prepared without it
The government announced a nine-month delay to the start of the new financial services regime last year - something which gave the adviser sector ‘crucial’ breathing space, according to Financial Advice New Zealand, and CEO Katrina Shanks said she doubts the sector would have been anywhere near prepared enough if it had gone ahead in June 2020, as originally planned.
The government announced a delay to the new regime last May, pushing it back from June 2020 to March 15, 2021. Shanks said that advisers were under ‘too much pressure’ throughout the pandemic to focus on regulation, particularly throughout New Zealand’s longest lockdown period, as clients were relying on them to be the ‘voice of reason’ through a tough period.
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“I think the extension time was crucial, and we campaigned hard for it,” Shanks commented.
“I do not believe that advisers could have gone into the transitional licensing phase while COVID was happening, it was just too much pressure. They needed to focus on giving advice to their clients, so delaying until March allowed the sector to have some breathing space and focus on helping their concerned clients through a volatile period.”
“When it comes to their interactions with clients, advisers really are the voice of reason,” she explained.
“Because they build such trusted relationships with those they give advice to, they have a very holistic view on the needs of those clients, and what they need to do to be able to meet them. That was really important throughout the COVID period.”
Shanks said that while the new requirements have pushed some advisers to an early retirement, most have not seen them as a hurdle to offering financial advice. With COVID-19 relatively under control in New Zealand and global vaccination programmes ramping up, she said the sector will now be looking firmly towards future development and growth.
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“Some advisers have been looking to retire and not go into the new regime, but we’ve really seen the majority embrace the changes as opposed to seeing them as a barrier to giving regulated financial advice,” Shanks said.
“They’ve worked really had to get to where they are now with transitional licensing, and all advisers had to carefully consider what they were going to do in the future and how they would operate. Now that the first major hurdle has passed, I think advisers can really congratulate themselves.”
