Christine Hay is sole adviser for and Managing Director of Hawke’s Bay financial advice provider, Financial Sense Limited.
Christine recently talked to the FMA’s Anita Frazer about how she prepared her business to become a fully licensed financial advice provider.
Congratulations on receiving your Class 1 FAP licence, Christine! It’s been a busy time for the advice sector with so many competing priorities. What motivated you to get your full licence application done now?
I thought it would be really difficult to find time for something extra and as large as licensing on top of my day-to-day activities. So I made it a priority to prepare my application, plus I also wanted to use it as a “checklist tool” for my business.
I’ve been in business for twenty years and so I have lots of processes in my head – with a lot of things not documented. This was a great opportunity to get them formalised and it’s also been a great way to take a fresh look at my business.
I didn’t want to be panicked and leave it to the last minute in case there were gaps, so I decided to work a bit differently, getting started early and eliminating some of that stress.
For the Business Continuity Plan (BCP) - I already had a plan in my head of people I’d approach in an event - one for the insurance side of my business and one for the investment side. But I’d only ever casually talked to them about it and they didn’t have any formal idea of what I’d require for them to run my business in the case of any major event.
How would my business carry on if something happened that stopped me being able to service my clients myself?
Talk us through how you went about the application process - where did you start?
For me it was about breaking it down into small chunks. I couldn’t take a couple of days away from my clients to develop policy - my clients can’t wait!
I dedicated one hour per week, setting up the time in my diary for the same day, same time, every week – I did this for three months – just that set hour each week, no more. It took me 10 weeks and I was done! Including reviewing that’s just 10 hours in total.
My core basis was the Partners Life Adviser Support Programme. Then I also used the FANZ webinars and the FMA guidelines put out about the process and what they were looking for, as my review process.
Any unexpected hurdles along the way?
No, no hurdles at all. There were some areas that I had to come up with a process I hadn’t previously thought about. Some little tweaks to some of my checklists and Statements of Advice wording, nothing major but it means I’m now meeting the requirements.
What does it mean to you and your business to have been granted a full licence?
It was a big relief at how straightforward it all was. I think I’d blown it up in my head to be a much bigger task than it turned out to be. I now feel more confident in my business and I feel that if anything happens to me, I know that I’ve made changes so my business can keep looking after my clients.
Any pointers for other sole adviser FAPs getting ready to apply?
Just get started on it and break it down!
It may feel like quite an unsurmountable task without breaking it down into smaller pieces. We’re all so busy now and clients are very demanding with COVID times and everything else that’s going on. It may seem easier to put it on the backburner and think: ‘I’ll service my clients and do it later in a future quiet time.’ But I really don’t think there’s any quiet time coming.
I’d also recommend the FMA forums. I was already quite a way down the track, ticking off policies and procedures, but hadn’t got to the point of logging in to start the application form itself.
Once you get started on the application you can always go back and review process and procedure documents to tweak them and update with any changes. They’re ‘live’ documents.
When I finished the process I thought – wow, that’s it, it was easy! The questions were all pretty straightforward. I’d allocated three full hours to the task but it didn’t even take that long.
After I submitted the form, the FMA contacted me with a few questions about the legal structure and set up of my business. They were easy to talk with and it was such a cool feeling when that approval came through.
My advice to other advisers: just go and do it – don’t wait for that quiet period!