Industry leaders are urging brokers to give themselves time to adjust to the new NCCP regulations.
The new requirements officially came into play on 1 January 2011, putting greater pressure on brokers to meet compliance requirements and prompting up to 20 per cent exit the industry.
The NCCP Act has increased costs and responsibilities for brokers, but the heads of both industry associations have largely backed the legislation as a significant step forward for the industry.
FBAA president Peter White told The Adviser that while brokers will inevitably struggle to adjust to the new regulated environment, the industry is undeniably better off for the introduction of licensing.
“I think it will take the vast majority of the industry six to 12 months to adjust to the new regulation. That said, I do not believe the requirements brokers will face under the new regulated environment are too onerous,” Mr White said.
“I understand that the amount of paperwork a broker has to complete has increased dramatically. But, in the long run, I think brokers will come to see this as a good thing as it will help them understand not only their clients’ financial wants, but also future goals, which will ultimately lead to repeat business opportunities down the track.”
Mr White’s comments were largely echoed by MFAA chief executive Phil Naylor.
Mr Naylor told The Adviser that the NCCP Act would force brokers to implement an up-to-date business plan and establish better customer service skills.
“The increased responsibilities around documentation will only serve to increase professionalism within the industry and I think most brokers understand that,” Mr Naylor said.
“The NCCP is scaled, so that different sized brokerages have fair and reasonable requirements.”
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