New Financial Advice Regime Offers Opportunities for Advisers

Highlights:

• New Opportunities for Advisers: The Financial Advice Providers (FAPs) regime allows advisers to step back from day-to-day operations, mentor younger professionals, or sell shares, offering greater flexibility in career transitions.
• Shift in Adviser Numbers: Since March 2023, 3,702 financial advisers have deregistered, while 3,165 new advisers joined, leading to a net reduction of 537 advisers in the industry.
• Successful Transition for Sole Advisers: The Ministry of Business, Innovation, and Employment designed the FAP regime to support even sole advisers in maintaining a well-managed business under the new regulatory structure.

The introduction of the Financial Advice Providers (FAPs) regime has opened up new avenues for financial advisers. Under the new system, advisers can now create or join businesses with proper licensing, allowing them to explore various roles beyond traditional advising.

Opportunities for Advisers Mark Banicevich, Head of Industry Engagement at Partners Life, shared insights on how the industry has evolved since the new regime took full effect. Banicevich noted that advisers can now take on roles such as mentorship, directorship, or even selling shares in their businesses, allowing for a gradual exit from day-to-day operations.

Flexible Transition Instead of retiring completely, advisers now have the flexibility to step back, mentor younger professionals, and still be involved in decision-making. This is a significant shift from the old "all in or all out" approach.

Industry Shifts The FAP regime, implemented in March 2023, has led to the deregistration of 3,702 advisers, but 3,165 new advisers have joined, resulting in a net loss of 537 advisers. Despite the decrease, Banicevich believes the regime's structure, designed by the Ministry of Business, Innovation, and Employment, supports sole advisers in maintaining successful businesses. Interestingly, 137 FAPs currently operate with no financial advisers, while the three largest FAPs collectively engage 1,968 advisers.

This regime is reshaping how financial advice is provided, creating opportunities for advisers to remain engaged in various capacities while ensuring continuity in the industry.

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