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NZFAA: Two not a crowd

Financial advice becoming a profession doesn’t mean having only one professional body, the head of the New Zealand Financial Advisers Association (NZFAA) says.

Monday, February 25th 2013, 6:00AM 2 Comments

by Niko Kloeten

The NZFAA, which formed from the merger of the Life Brokers Association (LBA) and TNP Professional Association (TNPPA), launched at the start of the year and had its first adviser meetings as a merged organisation last week.

David Yates, general manager of the NZFAA, said the organisation's main focus was on registered financial adviseers, although a number of its 200-odd members are authorised financial advisers.

“I think one of the characteristics of a profession is a professional association or professional associations. If the adviser is looking to present themselves as professional they should be a member of an association.”

Yates said professional associations required four features: professional development, professional designations, compliance support and advocacy.

And he said the answer was “categorically yes” as to whether there was room in the market for more than one of these associations in New Zealand.

“If you look at models around the world such as in the UK, the USA and Australia, there are a number of professional associations serving the different needs of adviser channels. There is absolutely room for
two or three good quality professional associations in the market.”

Yates wouldn’t disclose the NZFAA’s end-of-year membership target but said the association expected to reach its target by September or October.

He said the feedback from advisers on both sides of the merger had been positive and there had already been about a dozen non-financial LBA members who had become financial members of the NZFAA.

Advisers had accepted the association’s compulsory CPD requirement, he said.

“There’s a legal obligation to conduct your practice with care, diligence and skill and there’s general recognition that professional development is part of that.”

Niko Kloeten can be contacted at niko@goodreturns.co.nz

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Comments from our readers

On 25 February 2013 at 10:30 am David Whyte said:
When did providing financial advice become a profession and how is a profession defined? Simply calling your occupation a profession doesn't mean that it is just because you say so. Also, being paid fees for what you do does not make you a member of a profession. If it does, then every occupation is a de facto profession, as anyone could claim that their remuneration is fees.
I'd suggest that in modern parlance, medicine, law, chartered accountancy, and the like are accepted as professions. Before you can practice any of these vocations, you must pass tertiary level examinations. This is not the case with providing financial advice. In some instances, no examination qualifications are required - for example, in the provision of life insurance risk advice.
A profession is a vocation entered exclusively by examination, and where membership is retained by adhering to ongoing competency standards.
Providing financial advice is not at this stage.
On 2 March 2013 at 3:23 pm Miles Hayward-Ryan said:
Responding to David Whyte and the article: A profession arises where the obligation is to put the client's interests first. The traditional professions have that requirement built into their private code. Financial advisers are catching up albeit with government imposed obligations.

Responding to the article, it would seem logical to have one association for each of mortgage brokers, risk insurance brokers, investment advisers, etc. There should be a commonality of interests. The legislation is a poor determinant of commonality of interest.

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