IFA lobbys for longer licencing periods

The Securities Commission said last month that it is considering setting all licence periods for between three and seven years and in the absence of information on which to base that assessment, the default period proposed for all advisers is five years.

IFA chief executive Peter Lee says because institute members as a whole and CFPs and CLUs in particular are subscribing to higher standards than authorisation, the licencing period should be longer.

The institute has made a submission to the Securities Commission saying its members should have a licencing period of six years with CFPs and CLUs having the longest period of seven years.

Firstly, institute members have to subscribe to continuing education requirements of 60 hours over two years, "which is considerably in excess of the Code of Professional Conduct for Authorised Financial Advisers (the code) which requires 20 hours a year - they are doing a lot more professional development".

Secondly, he says the institute's Code of Ethics has an internal disciplinary process which is tougher (apart from the legislative side) than anyone else.

"We've always held our members accountable in addition to the statutory processes that a client can go through."

Lee says CFPs and CLUs in particular have had to show they have very high standards of knowledge with the CFP being an international best practice designation.

"So we think people that have that and the CLU ought to have the longest possible licencing period because they are operating at the top end of the profession."

He says the code itself and a lot of the requirements for the level 5 certificate are based directly on what the institute and CFP prescribe, for example the six step process.

The institute is now waiting to hear back from the Securities Commission about its submission.

Comments from our readers

On 15 October 2010 at 7:51 am Independent Observer said:

7 Years is a long time in the financial services industry – particularly if you reflect on where you & your business were back in 2003 compared to today.

My preference would be for the license requiring annual re-validation (yes – more forms) providing the Issuer with greater flexibility to revoke the licenses of those participants who are unwilling to comply.

On 15 October 2010 at 8:42 am Forthright said:

Mr Lee recently stated the IFA was the only body committed to professionalism, now he is adding some IFA members are more professional than others because they have CFP or CLU after their name and deserve more preferential treatment than the less deserving IFA members without CFP or CLU after their name. Mr Lee may get his wish and have only CFP and CLU as members of the IFA. Good luck in getting them to pay your salary Mr Lee.

On 15 October 2010 at 10:19 am Independent Observer said:

Let me add to the previous comments:

The current status of the NZ financial services industry is that it is overly fragmented, with too many entities representing different groups. This reduces the industry’s ability to effectively lobby for preferred outcomes, or to effectively assist the variety of members within each of the industry entities.

It now appears that the new entity in town is the Regulator – who now represents us all. The challenge is to ensure that the playing field is level for all participants – without distinguishing one group from the other. In other words: I believe that the IFA (and any other groups seeking special segmentation) has limited chance of success.

On a broader level, this raises an interesting dilemma around the future value proposition of many of the industry bodies. The days of monthly gatherings, annual conferences, and lightweight correspondence presents a real challenge for those industry bodies who are competing with the Regulator for a share of the industry’s membership dollar…

IFA lobbys for longer licencing periods

The Institute of Financial Advisers (IFA) is lobbying to get its members, certified financial planners (CFPs) and chartered life underwriters (CLUs) longer licencing periods under the standard terms and conditions of the Financial Advisers Act.

Friday, October 15th 2010, 6:54AM 3 Comments

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