Author: David Whyte
Over 150 submissions have been made by interested parties. The task of sifting through these submissions, to establish an appropriate and acceptable way forward, has no doubt tested the limits of those involved.
There are some issues that seem to be emerging as common ground;
- Education – consumers are entitled to believe that a financial adviser is suitably qualified in the area(s) where advice is being offered
- Designation – consumers are confused about the difference between a Registered Financial Adviser and an Authorised Financial Adviser. With the educational qualification requirement, these titles are likely to be abandoned in favour of one overall designation
- Code of Conduct – at present, only AFAs need comply – it is likely that all financial advisers will be subject to the Code, or an amended version. This includes the disclosure provisions and the internationally accepted 6-step process for bringing a client on board.
Areas where there is less commonality of thought include, entity licensing as opposed to individual licensing, the sales versus advice issue, and remuneration.
Where does VideoSign and its solutions fit with the impending new regime?
Within the process of taking on a new client, there are key compliance steps requiring the client to be presented with documentation for signature.
- Disclosure – the adviser will have to disclose their status, qualifications, and basis of remuneration, as well as membership of an approved dispute resolution scheme. This has to be signed as acknowledgement of understanding by the client.
- Scope of Advice – the client must be informed what specifically is to be covered in the advice process, e.g. retirement planning, mortgage protection, etc. Again, the client signs and returns this document as agreeing to the scope of advice to be offered.
- Statement of Advice – the adviser’s recommendations with all relevant details must be provided to the client for acceptance, modification, or rejection with signature required against the appropriate field.
These three documents are likely to be the core requirements for all New Zealand advisers following the review. VideoSign is ideally positioned to provide a simple, cost-effective, and efficient solution to compliance in this area.
The travelling time and expense saved in obtaining signatures on these documents only reinforces why VideoSign should be adopted in an advice business.
It is, however, the ability to transfer control of documents in a virtual meeting room and to explain everything to the client face-to-face where VideoSign begins to shine. Recording the entire process for all time, provides a compelling reason for integrating VideoSign into an adviser’s standard operating procedures.
So at any point in the future should the Financial Markets Authority (FMA) call to review processes, or should there be dispute, complaint, or litigation to face; the adviser has a permanent record of events available for recall as and when required.
There is no doubt that compliance has added to the cost of being in business as a financial adviser.
VideoSign provides a professional and cost-effective solution to meeting compliance obligations, reducing expenses, offering clients a quality and personal service.