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FSC CEO Richard Klipin said the process would be a great opportunity for advisors to re-evaluate the way their businesses operate, make improvements and increase customer focus, which will yield benefits to longer term. He said that while overhauling the regulations is certainly difficult and requires significant time, resources and investment, the results will go beyond mere compliance from a regulatory perspective.
“The process of getting a new license is actually an opportunity for advisors to rethink their business model, typical clients, pricing structure and other aspects of the business,” said Klipin.
“So in many ways this opens the door to a number of other strategic questions for companies, and we encourage them to focus on the kind of business they want to have in the long run – not necessarily just. in 2022/23 while facing a regulatory hurdle.
Read more: Advisory group talks about its unique license structure
“I think that will be the silver lining in all of this,” he said.
“It pushes businesses and business owners to really think about these things, and I think that’s a really good thing. One of the ways the wider financial services community can help advisors is to frame these questions, help them think through them, and then help them implement them. “
Klipin acknowledged that the current outbreak of COVID-19 in Auckland and other parts of the North Island is undoubtedly a challenge, and leading a major review and overhaul of business practices will only add pressure.
However, he said the time to see it as a “regulatory burden” is now over and the key to successfully transitioning to the new regime will be having the right mindset – especially when it comes to how. whose changes can help increase efficiency, as well as the profile and reputation of the company.
“’Regulatory burden’ has been a constant theme – there is more to do, there is more oversight and more requirements, and the costs of not doing it are high,” Klipin said.
“All of this is true, but the system is changing after a long and thorough review. People were fortunate enough to have a say, and now we’re at the final point of getting it right.
“It is clear that business processes and practices will have to change, and for some people it will be an opportunity to automate and use technology, or to rethink their process,” he added.
Read more: Advisors are about to get a first look at the full licensing process
“Others will struggle with this because it is more time, energy, cost and money. But for long-term business owners and advisors, it comes down to thinking about how you can use all of this regulatory change to improve your business and achieve better results for your clients knowing that it is. will be hard work.
While reflecting on the overhaul of the financial services industry at the recent FSC ReGenerations Reimagined conference, outgoing FMA CEO Rob Everett said that while the driving journey in New Zealand is well underway, he was still only “halfway there.”
He said the Australian Royal Commission had brought to light some “outrageous” practices across the divide, and while he didn’t think this kind of misconduct was widespread in New Zealand, it was important to create an environment where this could not easily happen. .
“I have to say that while now, at the end of 2021, I’m confident to say that real progress has been made, it hasn’t been easy,” Everett said.
“As those who recently read our General Insurance report, we continue to be offended by instances where we see how little boards and senior management do until the FMA either at their door. “
“But we also see advisers, insurers, funds and banks striving to serve clients in times of need and working hard to meet our expectations,” he said.
“The New Zealand industry will thrive if it remembers who it serves – every man, woman and child in New Zealand. Our economy cannot prosper without knowing that financial products and investments are offered and sold in an honest and fair manner. “
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