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FAA delay no reason for complacency

The big news last week was that the review of the Financial Advisers Act has been pushed back due to the Kaikoura earthquakes. We had been promised an exposure draft of the new rules before Christmas but we will now have to wait until next year. 

What this means to the Minister's aim of getting new laws past before next year's general election is unknown. Potentially it is further complicated by John Key's decision to step down as Prime Minister. Whoever fills his shoes may appoint a new Commerce Minister and may well have different legislative priorities.

Putting this all aside In the latest issue of TMM (click here) we have talked to banks and dealer groups about the proposed changes and what they mean for mortgage advisers.

The first key point to take out of this is that if MBIE follows through with what it says (abolishing AFA, RFA and QFE labels and replacing them with FAF, FA and agent) then the entire mortgage advisory world will be tipped on its head.

Indeed it may well force some individual brokers into other businesses or out of business altogether.

The second point is that there is a wide disparity among the industry about how they may handle it.

At one end some have started getting things in place for a change.

At the other end it's nearly a head in the sand approach. We will wait to see the new laws before thinking about change.

In my humble opinion I don't think that is a realistic option. Everyone needs to be thinking about what is proposed and how it may change their world. Also the Code Committee has released a new code for AFAs. While this is likely to get changed again, it is likely the code will extend to people who are currently RFAs. Check out what is in it now.

- Philip Macalister


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