This article is from Good Returns published 24 August, 2021.
Financial advisers are being urged to apply for their full FAP licence sooner rather than later.
FMA Principal Consultant, Market Engagement Derek Grantham says, “I believe there are clear benefits to getting the job done early. And it’s not for the reasons you may think.”
He says transitional licensing showed that the bulk of the advice industry is made up of small to medium sized businesses of 10 of fewer advisers.
SMEs often are stretched for time and resources and prioritise work in the business over work on your business.
Also, transitional licensing showed that many firms left licensing until the last moment.
Grantham says under a full licensing an adviser business has to show it has processes in place; but they don’t have to be perfect.
“Nobody’s asking you to produce perfection: perfect structures, perfect processes, perfect policies are not required to apply for a FAP full licence. What is required is demonstration that you’ve thought about the risk and taken meaningful steps to address it, in a way that makes sense for your business.”
Meanwhile, The Adviser Platform (TAP) managing director Ryan Edwards says, “there is not enough support being provided across large parts of the industry.”
“There are lots of people telling advisers what to do but many sitting down and helping them through the licensing process.
“We believe with the right support advisers can run their own FAP,” he says.
However, applying for a full licence is not a quick or easy process no matter the size of your business.
He says TAP has developed a new service to help advisers through the process.
A TAP Licensing Manager can: Review an adviser’s current FAP structure and identify potential gaps, provide any necessary tools, policies and processes to fill the gaps. Help submit the application and complete the FMA assessment and then assist with ongoing oversight and compliance obligations.