04 Aug 2015

The top five legislation changes Financial Advisers need to know

Last month (13 July 2016) the Commerce and Consumer Affairs Minister – Paul Goldsmith, announced changes to the Financial Advisers Act.  At Cumulo9 we specialise in email communications and consequently work closely with many Financial Advisers. To make sure we stay on the top of our game in this sector we have had a look through the legislation and listed the top five email related communication changes we think will likely impact on Financial Advisers.

Oh and if you’re interested, at the end we’ve also listed some of the ways Cumulo9 can help Financial Advisers with communications and compliance!

#1 – Current Adviser designations replaced

No more confusing designations – gone are AFA’s, RFA’s and QFE’s.  Now anyone providing financial advice will be known as either a “Financial Adviser” or an “Agent”. For Financial Advisers it could be time to update your email signature and your business cards.

#2 – The customer comes first

Advisers are required to put their customer’s interests first and provide advice only where they are competent to do so.  This one is a no-brainer, surely there are many competent advisers out there offended that anyone would suggest that they did not always put their customer’s interests first already!  FA’s need to know that this will be supported by FMA monitoring and enforcement.

#3 – Unnecessary complexity removed

Tailored advice from a natural person is no longer a requirement.  This change enables the provision of Robo-advice*.  This service is growing overseas and aims to provide more affordable advice.  Clearly, there are some significant implications for Financial Advisers out there, the big one is that the standards will need to be the same i.e. competence and whether or not they choose to incorporate automation into their offerings.

*Just what is “Robo-advice”? A Robo-advisor is an online wealth management service that provides automated, algorithm-based portfolio management advice without the use of human financial planners.

#4 – Improved customer understanding via disclosure

The disclosure requirements for all types of advice are to be simplified and shortened to help improve consumer understanding and transparency.  Core information like the scope of service, remuneration and competency will need to be provided in user-friendly formats.  FA’s will need to review their current disclosure practices and ensure they meet the new requirements.

#5 – It’s all about New Zealand Inc.

The last key change in the legislation we’d like to draw your attention to is the requirement for businesses to have a stronger connection to New Zealand.  To register on the Financial Service Providers (FSP) Register you’ll need to:

  1. Be based in New Zealand and
  2. Provide financial services to New Zealanders

This last change will make it more difficult for entities to register on the FSP Register if they do not have a real connection to NZ.  It will also make it harder for them to pretend they are licensed or actively registered in New Zealand – a good result we think.

So you may ask why we have noted these changes and wonder how can Cumulo9 help Financial Advisers with compliance of the new Act?

  • Mailprimer One-to-One seamlessly brands and tracks your business/employee emails. This easily implemented solution is designed to improve brand experience and with rotational banners helps to break down customer ‘silo’s’.
  • Cumulo9 can provide landing pages and personalised disclosure documents linking directly from your everyday email.
  • Mailprimer One-to-One provides real-time email tracking typically used for prospect follow-up and delivery assurance, plus of course, it provides a simple, version controlled disclosure statement solution used extensively by brokers and adviser users (and companies) across NZ
  • Lastly, if you’re interested in learning more about Robo-advice opportunities, Cumulo9’s automation technology has specific solutions to help you seamlessly communicate with your customers.

To find out how Cumulo9 can help New Zealand Financial Advisers comply with the new legislation call Cumulo9 on 09 377 8885 or email sales@cumulo9.com

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