We asked Director of Market Engagement John Botica and Principal Consultant Derek Grantham to reflect on lessons learned from the first year of full licensing and their view on what matters most in the months ahead.
While most of us will be pleased to see the end of 2021, we can’t let it close without acknowledging the huge efforts of all those in the financial advice sector who stepped up to welcome the new era of licensing against some pretty tough odds.
We want New Zealanders to trust the financial advice sector; we want to promote advisers as true professionals, and to encourage more people to engage in their financial futures.
Here’s what we’ll be reflecting on as we look back on the year that just was.
The milestone that was 15 March 2021 came and went, and New Zealand awoke to find itself in good hands with more than 3,000 financial advice businesses, engaging more than 10,000 financial advisers and over 12,000 nominated representatives. (And the team here breathed a sigh of relief that our online portal didn’t crash despite a last-minute rush of transitional licence applications).
Much like March, the three-month FSPR linking step passed without fuss in June as providers made real the value they place in their financial advisers by putting formal links in place with almost all of them. We were especially pleased to see so many small advice businesses remain in the mix, with 82 per cent of financial advice providers being businesses with fewer than 10 financial advisers, providing diversity of advice options for clients right across New Zealand.
In our mid-year report we noted that a few full licence applicants had rushed in at the gate, reading the application guide and then pasting our sample answers into the online application form. They did not pass Go and were sent back to the start. More recently, we’re pleased to say the quality of most applications has improved as you focus on just telling it like it is, documenting how you run your businesses – and care for your clients – in your own words, because you know your business best.
In September, First Capital’s Hugh Percy shared how he and his team worked together to become the hundredth FAP through the full licence door. They used the process as a benchmarking exercise: downloading the application kit from the FMA website and working through it methodically together, saving drafts where they identified any gaps. It was a triumphant moment when they could confidently say their business met the requirements and pressed “submit”!
In a similar spirit, many of our professional colleagues stepped in with support materials and online sessions to help financial advice providers prepare for full licensing. We look forward to more of these collaborations in 2022 and welcome future invitations to work together.
Looking ahead, the next milestone for most will be preparing to submit your full licence application by the target date of 30 September 2022 (for Class 1 and 2 licences).
With more than 80 per cent of providers still to transition to a full licence, there’s much work ahead for us all. Yet if the past year has proved anything, it’s that we know you can do it. And as in 2021, we’re here to help. Email [email protected] or contact us.
Meantime, enjoy a well-deserved break over the summer holidays, and we look forward to reconnecting with you early in 2022.