More questions about CPD
What qualifies for CPD credits under the proposed new financial adviser code of professional conduct remains unclear.
Monday, November 18th 2013, 6:30AM 
3 Comments
Under the proposals financial advisers will have to do 30 hours of structured CPD credits over two years instead of 10 hours structured and 10 hours unstructured credits over one year.
Code Committee chairman David Ireland told delegates at the recent Grosvenor conference that the current approach didn’t work.
Just ticking boxes and saying you have amassed sufficient CPD credits “is not enough training for competency.”
Professional development is not just about attending events and conferences and getting credits.
Credits that count towards the proposed new rules have to fit with an adviser’s professional development plan.
He says if the credit doesn’t fit the plan then it shouldn’t count towards the 30 hour total.
“If [the event] is outside identified learning needs it doesn’t count,” he said.
However, he said that the professional development plan was a living document and could be amended to address an adviser’s changing competency needs.
Ireland was quizzed about what would count and what would not. He admitted there were some grey areas. The question advisers should be asking themselves when they consider counting a credit was: What does it do to help the adviser maintain competency?
One example he said wouldn’t count was doing a course on business accounting. While it may help the adviser their practice, it doesn’t achieve the competency objective.
He also suggested that attending product promotions and launches probably wouldn’t fit the criteria.
The Code Committee met last Tuesday to finalise version 2.0 of the code.
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Doing a course in business accounting would be of great assistance to an AFA in understanding company accounts, and investment statements, PDS's, prospectuses etc wouldn't it?
Doing a business accounting course would also assist us with Code Standard 15 in the old Code of 'minimum standards of competence, knowledge and skills required to provide financial adviser services.' This standard says that an AFA must have a knowledge of the Act, the code and other legal obligations relevant to the operation of a the AFA's practice as a financial adviser (including relevant consumer protection laws), that is adequate to the proper operation of that practice.
Maybe my interpretation of the principles based legislation is misguided, but I would interpret that to also mean a clear understanding of accounting rules, accounting laws and principles, to make sure that an AFA is not running a business improperly.
Competency according to the principles based legislation is surely very wide in its definition. If I am doing a needs analysis and the 6 step process with a client, any understanding of behavioural finance and therefore psychology must be relevant.
So would ethics training, so would anything be that helps me to 'behave professionally'. A course on how to improve grammar, spelling, diction would be just as relevant surely, as a technical education programme on particular investment strategies?
One of the great things about being a financial adviser is that we require a very broad set of skills to do our jobs competently. It goes back to the old adage that we get to know more about our clients than any other profession - more than a doctor, more than a minister. That is, if we are doing our jobs well.