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  1. #21
    Advanced Member BIRMANBOY's Avatar
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    Wow who would want to be an accountant (or receiver) for that matter. Must be incredibly difficult getting to grips with all of that. Thanks Liz. Hopefully the investors will get a portion recovered. Glad I do my own investing thats for sure...knock on wood.
    Quote Originally Posted by Lizard View Post
    Well at least they haven't found that sort of volume so far... although you can check if your junior explorers are on what they've found so far:
    http://www.pwc.co.nz/PWC.NZ/media/pd...ember-2012.pdf

    Look to the last few pages.

  2. #22
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    I think the worrying part is that he managed to get AFA certified, despite the fairly rigorous demands the FMA put in place. Maybe the FMA need to comment on how he passed the "Adviser Business Statement" part - and whether he ever received a visit under the monitoring requirements: AFA Monitoring and Review.

  3. #23
    Advanced Member BIRMANBOY's Avatar
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    I see they visited some locations in Wellington and Hutt Valley..would be interesting to know which ones. You can understand the difficulties from the FMA point. There must have been an awfull lot of resistance to them..."i've been advising my clients for 20 years ...whats the govt doing poking their nose into my business". "Some callow recent graduate who knows s**t about the real world". Grandfathering clauses are always difficult in the transition periods. Old boys resistant, new ones nervous and the FMA trying to baby the "bad boys" along without causing mayhem and precipitating a crisis.
    Quote Originally Posted by Lizard View Post
    I think the worrying part is that he managed to get AFA certified, despite the fairly rigorous demands the FMA put in place. Maybe the FMA need to comment on how he passed the "Adviser Business Statement" part - and whether he ever received a visit under the monitoring requirements: AFA Monitoring and Review.

  4. #24
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    Quote Originally Posted by Lizard View Post
    I think the worrying part is that he managed to get AFA certified, despite the fairly rigorous demands the FMA put in place. Maybe the FMA need to comment on how he passed the "Adviser Business Statement" part - and whether he ever received a visit under the monitoring requirements: AFA Monitoring and Review.
    As far as I'm aware, an adviser does not need to provide an ABS to the FMA as part of the authorization process. As this is the case, he would not have to have one completed. If the FMA requested his ABS for what ever reason, he would be required to send one to them. You are supposed to have an ABS completed, and handy for the FMA if they wish to review it. Technically speaking, he could get away with not having one at all.

  5. #25
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    Quote Originally Posted by JPW View Post
    As far as I'm aware, an adviser does not need to provide an ABS to the FMA as part of the authorization process. As this is the case, he would not have to have one completed. If the FMA requested his ABS for what ever reason, he would be required to send one to them. You are supposed to have an ABS completed, and handy for the FMA if they wish to review it. Technically speaking, he could get away with not having one at all.
    I was just going off the FMA website. However, I note from the checklist that, although they are supposed to have an ABS, there is no requirement to actually upload it during the application process, only to acknowledge that there is one.

    Other requirements include qualification (the Massey Business Studies Diploma in Financial Planning or equivalent, I think), the two ETITO standards (about knowing the Code, set by a committee), three testimonials from a mix of clients or industry peers that have known you for more than 3 years and having an advisor business statement. There are a few other minor requirements, including fees.

    I have to say that the process is a bit circular for new people wanting to enter the industry - having personally completed the Massey Diploma, I thought I might try to get qualified and queried directly with the FMA the requirement to have testimonials from clients when I wasn't permitted to have clients and the difficulty of having an ABS without actually having a business. They advised me to enter the industry via a QFE.

    (For the record, I was somewhat put off when I found the only likely jobs that could get me qualified to provide advice on shares and portfolios would involve selling insurance and funds for at least 3 years first - I think I may have failed the "sales aptitude" test!).

  6. #26
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    Quote Originally Posted by Lizard View Post
    I was just going off the FMA website. However, I note from the checklist that, although they are supposed to have an ABS, there is no requirement to actually upload it during the application process, only to acknowledge that there is one.

    Other requirements include qualification (the Massey Business Studies Diploma in Financial Planning or equivalent, I think), the two ETITO standards (about knowing the Code, set by a committee), three testimonials from a mix of clients or industry peers that have known you for more than 3 years and having an advisor business statement. There are a few other minor requirements, including fees.

    I have to say that the process is a bit circular for new people wanting to enter the industry - having personally completed the Massey Diploma, I thought I might try to get qualified and queried directly with the FMA the requirement to have testimonials from clients when I wasn't permitted to have clients and the difficulty of having an ABS without actually having a business. They advised me to enter the industry via a QFE.

    (For the record, I was somewhat put off when I found the only likely jobs that could get me qualified to provide advice on shares and portfolios would involve selling insurance and funds for at least 3 years first - I think I may have failed the "sales aptitude" test!).
    Yes that's correct, you just need to acknowledge you have one.

    Speaking from experience I can clearly acknowledge you point regarding the process being circular and difficult for new entrants. Personally, I am in the industry and have managed to get almost everything completed through a QFE I work for. I'm in the final stages of becoming AFA now.

    It wouldn't be all too difficult to enter the market through a well-established advisory group and QFE who also provides insurance training. From there you can work through the work to become AFA alongside others going through the process with the goal of going out on your own and providing investment advice. The good thing about going through a QFE group, is that they'll have formal advice processes which you would be able to learn. Most of the work involved with becoming an AFA is showing formal advice process, understanding your client and products you are recommending.

    Without knowing much about you, based on your comments on this forum you seem very knowledgable and I'm sure the industry would welcome you with open arms. There is a massive shortage of authorized advisers which is well known.

    Apologies for going slightly off topic!

  7. #27
    Guru Xerof's Avatar
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    I understand he did have a prospectus.
    If thats the case, who are the Trustees and who are the auditors?

    I'm afraid I don't have any sympathy for the "chosen 900"...they have brought it upon themselves....greed and blind faith has enabled this to happen yet again

  8. #28
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    Quote Originally Posted by Xerof View Post
    If thats the case, who are the Trustees and who are the auditors?
    This is what I want to know also!!

  9. #29
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    Quote Originally Posted by Corporate View Post
    This is what I want to know also!!
    Xerof, Coprorate, I haven't actually seen one but I read some comments (I think on the NBR site) that 'investors' had been given a prospectus. The point I was trying to make though, was not if he had one but if there is actually anything behind them anyway. It is not hard for anyone to write a prospectus. I am sure anyone could knock one up in 10 mins. I also thought becoming an AFA was only a matter of passing a few exams but it seems from the above it is a little more involved so I guess there 'should' be some comfort there when dealing with an AFA.

    I do have some compassion for the investors however - despite how obvious the signs may have been. It is very easy for people on here to harp on about the basic investment principles but the mere fact that we are on here would suggest we have some understanding and interest in investing. However, obviously there are plenty of wealthy people who wouldn't know the fist thing about investing. So what do they do - ask people they trust (their friends etc) for advice. Find an AFA with a prospectus you trust. The next thing you know you have lost the lot with Ross...

    So then how to protect them? I agree with Lizards earlier post talking about the fine line between regulation and costs and personally wouldn't want to see any more costs of regulation added to the industry. However, I am pretty unlikely to be investing in a managed fund anyway.

    I just hope that even the most ignorant of investors knew enough not to put all their eggs in one basket. Unfortunately it seems that is not the case.

  10. #30
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    I've just done a couple of google searches and the articles I found note that there was no auditor. Surely if you are investing significant amounts of your capital in a managed fund, having an auditor would be one of your prerequisites!

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