Complying AFAs are unhappy. The latest survey by the FMA shows that - it also shows some fundamental misunderstanding of the regulatory regime by some AFAs, but on the advice of a higher authority we are encouraged first to "seek to understand, rather than to be understood."
So why are complying AFAs unhappy?
Let's examine first of all why they aren't unhappy: they aren't unhappy to be regulated.
Most of the small group of people that are currently AFAs were already operating to a high standard. A few are struggling, but most wrote good plans, focused on their customer, didn't lie, cheat, or steal, and they often held higher qualifications before the new rules than the level five qualification they were told to go and get.
This is where the grumpiness begins: in my picture book of words one of the definitions of nagging is being told to do something you are already doing. That's how a good number of AFAs feel. But this is a minor complaint.
Next up is that they see themselves as custodians of the industry. Long before the Securities Commission got rebranded, restaffed, and newly housed, these people have been exploring what professionalism means through their industry, their practice, and have very often staked their livelihood on the outcome.
Some AFAs are thinking they have had a bigger stake in the industry, for far longer, than the johnny-come-lately regulator.
They also feel that in comparison with, say, RFAs, their regulatory regime is tough. Not unfairly tough on them, but unfairly easy on RFAs, or doctors, or teachers, too for example.
Finally, in consequence of that, they are customers of the FMA. Yes customers. Not in the sense that inmates at Mount Eden are sometimes referred to as customers, but genuine customers. A key goal of the FMA's is to help improve confidence in the financial system.
Recent events show that for whatever reason the bad stuff is still happening - and that damages client confidence in complying AFAs - it's not their fault; they think it was the FMA's job to stop it, and they are free with their criticism.
Once again I would underline that not all of this is justified, or not entirely justified. We stand at a fork in the road, so to speak, where the FMA, and the large majority of complying financial advisers, product manufacturers, and others can move ahead and little by little things will get better and better. I believe this is the clear intention of all concerned. It is only by error or misunderstanding that we shall take the other path where an adversarial dynamic emerges and becomes fixed. But errors and misunderstandings are easy to come by.