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Fewer than 1000 complete level 5

Tens of thousands of registered financial advisers will have to head to the classroom if the Financial Advisers Act brings in a compulsory level five qualification for all, New Zealand Qualifications Authority data shows.

Thursday, April 21st 2016, 6:00AM 3 Comments

by Susan Edmunds

Barry Read

The Ministry of Business, Innovation and Employment is due to report to the Commerce Minister by the middle of the year on its recommendations for a revised Financial Advisers Act.

It is expected that all financial advisers will be required to meet new competency and qualification standards – likely the New Zealand Certificate in Financial Services Level 5.

There are believed to be about 6500 registered advisers and tens of thousands within QFEs who could potentially have to qualify.

NZQA said since 2009, just 939 people had completed the National Certificate in Financial Services Level 5.

None had yet been recorded as having completed the new New Zealand Certificate, which replaced it.

The qualification is the core standard for authorised financial advisers, although there are alternatives such as graduate diplomas or university degrees.

NZQA could not give data on how many had enrolled and not finished the qualification.

But Barry Read, of compliance firm IDS, said the number was probably significant. “There were a number of registered financial advisers who prior to June 2010 had begun studies and then after the change from ‘financial planning service’ to ‘investment planning service’ [in the legislation] they stopped.”

He said the qualification was not difficult to complete because it was only a polytech-level certificate. But he said having a single certificate as a competency standard would not be the right way for the industry to go.

“I’d much rather see the industry bodies get together and come up with some competency standards that could be measured in other ways.”

That could mean workplace assessments, he said.

But David Greenslade, managing director of Strategi, said it would be a positive step for the industry.

“Some will struggle but they are likely to be people who have not undertaken formal education for a long time, those who are resistant to change. Even the new level five is like sucking eggs… they’ll go ‘I’ve been in the industry for 30 years, I know this’ and try to switch off and continue to regurgitate what they know from past experience. We’re seeing that now.”
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Tags: Financial Advisers Act IDS qualifications Strategi

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Comments from our readers

On 21 April 2016 at 8:02 am Referee said:
Perhaps those without Level 5 or higher should indeed be re-classified as financial sales representatives. "The time has come.", the walrus said.
On 22 April 2016 at 3:15 pm smitty said:
Hmmm, why, when I read it, I'm thinking I will have to pay an outside training org to complete level 5, when in actuality I have a Post grad in Financial Planning, not to mention CFP. Though I wouldn't mind doing it if it meant that all people that gave advice, or dabbled in giving advice would have to complete it, you know who you are... legal profession / Accounting profession... I'm prepared to sacrifice some cost and time to ensure that all people giving advice has to hold level 5. Any other takers?
On 23 April 2016 at 10:43 am Aurora said:
I agree Smitty, how many times have client recommendations been torpedoed by their accountant giving unrecorded, unresearched advice. A recent case I was involved with had an accountant recommending our client increase his ACC cover in favor of income protection. All verbal compared to my full discovery, research and SOA. PS this client had also had a mini stroke one year making a ramp up in ACC cover even more mindboggling. I think minimum std is great, you shouldn't be able to simply pay, register and then call yourself a financial adviser in my opinion this is completely misleading. Oh but I thought there was an ACT of legislation for this?

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