Yet Another Big Reason for UnityTuesday 07 March 17
The Consultation Document – New Financial Advice Regime, has done much more than spur discontented commentary from advisers; it has highlighted the absolute need for a unified voice on the big issues. A single powerhouse that represents ‘advice’ and client-first, accountable advisers. To the public. To the Regulator. On behalf of members.
While not discounting that a number of elements in the Exposure Draft are very positive, to achieve the overarching intention of this regulatory change – to help more New Zealanders access good financial advice – the public must have better clarity about the difference between sales and advice. To this end, the proposed Financial Advice Representative (FAR) designation is a big missed opportunity – for the Regulator, for the value of advice, and for New Zealanders.
To increase awareness and understanding, and as a result confidence and access, the public need ‘advice’ and ‘advisers’ to stand for something quite distinct from other financial service experiences.
The public need ‘advice’ to stand for a highly valuable experience, in which they engage a qualified and accountable professional who uses their knowledge, expertise and discretion to help them make an informed choice appropriate to their personal needs and situation. Granted, that sentence isn’t exactly an ad campaign; but it does embody the meaning and value of the advice experience – as distinct from sales – and the adviser who provides it.
A Financial Advice Representative (FAR) in most cases will not be providing a comprehensive advice experience, and will not be individually accountable for their advice. But with the word ‘advice’ in their title, how is a member of the public to know the potential limitations of the FAR service? How will they be able to differentiate between this and the comprehensive advice service of a Financial Adviser (FA)?
Disclosure and compliance may very well clarify limitations once a member of the public has sat down for that first meeting; but how do they identify their preferred experience before they choose a person or brand to deal with?
If the new regulation misses the opportunity to provide clarify for the public about the difference between the sales and advice, unity and the role of the Financial Advice New Zealand will be all the more crucial. In this changing world of financial services, it is abundantly clear that the adviser community, the public, and ‘advice’, need the clout of a strong, unified voice – Financial Advice New Zealand.