Representatives from the United States-based Certified Financial Planner (CFP) Board of Standards have been in New Zealand for three days this week investigating the proposed merger of IAFP and the IIAA.
Representatives from the United States-based Certified Financial Planner (CFP) Board of Standards have been in New Zealand for three days this week investigating the proposed merger of Association of Investment Advisers and Financial Planners (IAFP) and the Investment and Insurance Advisers Association (IIAA).
The outcome of this visit is crucial to the success or failure of the proposed merger.
The CFP will have to endorse the proposal in order for it to win the support of the majority of IAFP members.
CFP vice president and general counsel Dick Young says the visit to New Zealand was very much a fact-finding mission, and the ultimate decision of whether to sanction the merger proposal would be made by the 20-member CFP board.
While the CFP board's support is crucial to the merger it only became fully aware of what was happening in New Zealand this year.
Young says the merger proposal will be supported if it is positive for the CFP brand that includes having a high level of standards within the new organisation.
"If this (merger) is a positive step we would see no reason not to support it," he says. However he notes bringing financial planning and risk-based advisory associations under one banner is a relatively new issue for the CFP and it is important that it is done properly as it will be establishing precedents.
Young says the CFP board will make its decision on whether or not to support the merger "as soon as possible".
The key criteria for the board is to ensure the CFP designation is protected and promoted and the people using the mark are qualified and operate under a code of standards.
The IAFP has held the CFP licence since March 1996 and has scored well in some areas, while other areas (such as promotion of CFP) it could have done better.
Young acknowledged there were some shortcomings in the IAFP's performance and there have been some concerns over leadership issues (with the former board).
The two CFP representatives did not meet with the IIAA on this visit because of logistical problems, however they are hoping to make contact at some stage.
Young acknowledged other (unnamed) parties are interested in picking up the CFP licence in New Zealand, however the CFP has "discouraged" communication with them.
He says the IAFP, as the current licensee, has first option on the licence.
There has been much conjecture in New Zealand over which of the CFP or the ChFC designations are the highest.
"We do not recognise that designation (ChFC) as being of the same standard (as CFP)," Young says.
He is clearly of the view that CFP is higher and financial planning is the leading discipline, rather than risk or insurance-based advising.
