by Paul McBeth
Bernard Gresham, a past president of the Financial Planners & Insurance Advisers Association which became incorporated into the IFA, would like to see new advisers undertake a two-year mentoring process as part of their training to give some practical experience on top of the theory they will learn as part of the proposed competency requirements.
Under the existing proposals, prospective advisers are not able to provide any advice to customers until they are accredited as authorised, and Gresham thinks it is risky to allow newly qualified advisers without any practical knowledge of the business.
"For new people coming into the sector, doing a few papers won't give enough knowledge for them to be giving advice straight away," Gresham told Good Returns. "It's in the public's interest and adds credibility to the industry."
Gresham raised the issue at the Code Committee's forum in Wellington to discuss competency requirements, saying when he first trained as a financial planner, he was mentored for two years where he would prepare advice and a senior adviser would sign off on what he did. He will make a formal submission to the body.
He acknowledged there could be a few issues that could make implementing a mentoring scheme difficult, such as finding enough people to take on the roles and excluding experienced advisers from having to prove they had been mentored during their training, but said the benefits would enhance the public's impression of the industry and that the regulation should cater for this addition.
Gresham was also concerned regulators are not doing enough to inform the industry around Qualifying Financial Entities, with a lot of people under the assumption that working for such an entity means advisers do not need to get authorised.
"There's a widely held belief that you don't have to be an AFA" if you work for a QFE, he said.
Paul is a staff writer for Good Returns based in Wellington.
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