The proposed transformation of New Zealand’s two largest financial adviser bodies into a single consumer-centric think-tank moves into its final consultation phase next week with a nationwide tour.
According to Bruce Cortesi, Professional Advisers Association (PAA) and his Institute of Financial Advisers (IFA) counterpart, Michael Dowling, the 11-centre roadshow was the last opportunity for advisers to provide face-to-face feedback on the merger proposals.
Dowling said since floating the concept of a single advisory body – dubbed Financial Advice NZ – last year, the two groups have principally “used technology to get the conversation going”.
“We’ve been surprised at the level and consistency of support for creating a single voice for financial advisers,” he said. “I thought we might have seen more divergence of views.”
Cortesi said the majority of feedback to date had been positive on the proposed Financial Advice NZ mission with about 20 per cent of responses “adding their own suggestions”.
Under the loosely-defined proposals, Financial Advice NZ would have building consumer confidence in financial advice as its core purpose.
The first phase of consultation extended beyond the 2,000 or so combined IFA/PAA membership to include up to 5,000 advisers via other organisations including the NZ Financial Advisers Association, Insurance Brokers Association of NZ as well as in-house corporate advisory groups.
“Now that we’re getting down to the detail level, getting the views of a broad selection of advisory groups is critical,” Dowling said.
Cortesi said creating FANZ as a consumer-focused body would be a win-win for both parties.
He said by providing consumers with information on how financial advice adds value – and how to identify good advice – they would become more comfortable dealing with advisers.
Advisers, meanwhile, would also benefit from a stronger flow of better-informed clients as well as access to best-practice advice models.
“Financial Advice NZ is looking to demystify the role of advisers and financial services for the consumer,” Dowling said. “That’s the originating idea, but not the only purpose.”
He said Financial Advice NZ would also continue to fill traditional advisory industry body roles such as lobbying and adviser support services.
However, Dowling said Financial Advice NZ could be structured to accommodate the “distinct culture of different advisory groups” via a system of “colleges or workstreams”.
“It may be the structure includes different groups where appropriate while speaking as a single voice where the issues affect all advisers,” he said.
While the Financial Advisers Act (FAA) reform process – due to restart in February – could diminish the value of belonging to industry bodies, Dowling said the IFA/PAA merger was aimed at future-proofing adviser associations.
“The PAA and IFA have looked forward 10 years and wondered why we would continue to be relevant then,” he said. “And we will need to add value to the consumer but it’s also important how we deliver on that promise.”
About 500 advisers have already signed up for the Financial Advice NZ national tour, which begins on January 31 with the final show set for March 13 at the latest.
Cortesi said the groups had set aside about 20 days to consider the feedback before tabling the draft Financial Advice NZ structure in May.
