She suggested that many of the issues surrounding the reforms could have been avoided if smaller advisory firms had been consulted, rather than just the regulators and big businesses.
“Precipitous”
Melanie Nutbeam, senior associate at Hong Kong-based firm HFS Asset Management, said: “Six months’ notice is precipitous. However, many businesses will have seen the writing on the wall in the wake of Hobbin’s case and hopefully made adjustments in anticipation.
“Those that didn’t are bound to find that the reforms impact adviser and business cash flows, causing some to review their operations and business models.
“The length of the notice period is a two-edged sword. Any longer and it might simply have caused panic mis-selling.”
“Sudden drop”
Chief executive of Convoy Financial Services, Mark Mak, said he expects the new regulation over ILAS commission models to adversely affect the group’s financial performance this year.
“Facing the threat of a sudden drop in income from our ILAS business, the group aims to aggressively expand our products and service offerings, in order to reduce the negative impact from the tighter restrictions on the ILAS market,” Mak said in a statement.
Based on Convoy’s preliminary review, the group expects to record a 55% decrease in revenue from its IFA business in the first three months of 2015, compared with that recorded by the group in the same period last year.
