by Susan Edmunds
Last month, Australia’s big four banks and AMP moved to require higher standards.
AMP told its 3800 Australian advisers that within five years they must all have CFP accreditation, Fellow Chartered Financial Practitioner accreditation or a master’s in financial planning.
That prompted pundits to suggest that New Zealand’s industry might soon follow suit.
AMP director of advice and sales Blair Vernon said:: "The conditions prevailing in the Australian advice market are unique and don't reflect developments currently relevant to our market in New Zealand. There have however, been areas of real concern over the quality of advice in some sections of the industry, particularly in respect to some finance company investments post the GFC, and we therefore have no basis for complacency.”
He said adviser regulation as it stands was a good initial step but there were a number of enhancements that could be made to create confidence and protect investors’ interests. He said they should be considered as part of the review of the Financial Advisers Act.
Vernon said “forward-looking diligence” was important because half the population had KiwiSaver accounts and balances were growing quickly.
“Our response will be driven by our assessment of market conditions, regulator direction and engagement and the best interests of customers. Any changes we make will take into account a balanced assessment of these and other factors that may emerge."
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Secondly, much of what is taught is, at best forgotten and more frequently overruled, at work. We all know that diversification is the only free lunch there is…. reduces risk whilst maintains returns. But look at recommendations from stockbrokers and private bankers and you will see that that idea is out the window… the reality is there are many investment plans recommending lots of concentrated portfolios in NZ and Australia and, most stupid of all, some advisors recommend five or ten international stocks as a proxy for the world stockmarket. That makes sense, not.
I’m looking at CPD at the moment and if anyone has attended any CPD that they think was a waste of time let me know. brent@cpam.co.nz
Regards
Brent Sheather