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Advisers thinking the New Zealand Certificate in Financial Services (Level 5) V2 is just another box to tick before going back to delivering advice the same old way they always have are missing a vital part of the qualification’s purpose.

Does the AFA reporting entity obligation now pass to the transitionally licensed FAP? Or does the authorised body that engages the former AFA now pick up that responsibility?

Complying with AML/CFT legislation is important, but this doesn’t mean implementing procedures that are unnecessary and outside what the law requires.

If you had asked me in August last year if the adviser industry would be ready for the new financial advice regime taking effect on 15 March, the answer would have been yes. At that stage, we had seven months to prepare which should have been ample for most. Sadly, with only a few days to go, the level of preparation is far from ideal. That said, a big well done is due to those who have put in the hard yards to be ready in time. You are exceptional. You have invested time, money and intellectual horsepower into understanding the new regulatory regime and preparing for it. You have built the required policies, processes and controls and hired staff to help take your business to the next level. I have every confidence you will succeed and see your business grow. Your proactivity is commendable. But I suspect you are a small minority - possibly about only 30 percent of the advice industry.

A quick trawl through the questions and comments we’ve received since the beginning of the year has revealed some concerning trends. All show a lack of detailed understanding of the new advice regime taking effect from 15 March. This is particularly alarming considering the huge amount of work undertaken by the Financial Markets Authority, the Financial Services Council, networks, large advisory businesses and product providers to ensure that businesses and advisers are ready for the go-live date of 15 March 2021. The queries we have received through our various communication portals - including emails, calls, chat bot, course questions and meetings - highlight three common misconceptions.

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Our Strategi Compliance AML auditors are frequently seeing AML programmes where an over-the-top template has been bought and then shoehorned into the business. The template specifies processes that are often unnecessary and don’t end up being followed anyway, due to their complexity.

AML supervisors recently advised us they expect reporting entities to take prompt action to remediate audit findings. Audits are a regulatory requirement aimed at identifying issues so reporting entities can improve their processes and comply with the law.

The regulations are a mixed bag – with some increasing compliance obligations whilst others make things easier. These regulations require all reporting entities to make changes to processes and documents. Strategi Compliance has produced a helpful Guidance Note outlining the regulatory changes and what needs to happen in your business.