Draft code “exciting” for mortgage advisers: Shanks

The requirement for a level 5 certificate under the new code of conduct for financial advisers presents an “exciting opportunity” for mortgage advisers to up-skill, says Financial Advice NZ CEO Katrina Shanks.

Monday, October 15th 2018, 9:57AM

The Code Working Group detailed its long-awaited plans for the new code last week. The main takeaway for mortgage advisers concerns qualifications. Financial advisers will need a level 5 certificate to meet requirements of the new code.

RFAs do not currently have a minimum qualification requirement. According to this year’s TMM Annual Adviser Survey, about 83% of mortgage advisers are RFAs.

According to the TMM Annual Survey, about 12% of the adviser industry are AFAs, and are already bound by similar requirements. Individuals can demonstrate compliance with the new regime by becoming AFAs before the new code commences.

Katrina Shanks, CEO of industry trade body Financial Advice New Zealand,  downplayed any concerns about the new qualification requirements. She said advisers without a Level 5 qualification had two years to achieve one as the industry transitions to the new regime.

Shanks said it was a “chance for advisers to upskill”. She added: “I think it’s exciting for the mortgage advice sector. Until now the industry hasn’t had a pinnacle mark of what standards look like and it gives them something to aim for. Also, it tracks a career path framework, that will allow people to move around the financial advice sector more freely, once they have done the level 5 qualification. It is recognition for mortgage advisers.”

Shanks said Financial Advice NZ would engage with the Code Working Group to clarify what qualifications were required for non-financial advisers.

The code remains under development under the jurisdiction of Commerce Minister Kris Faafoi and is set to be finalised by the end of the year.

Barry Read of Service Assist said the draft code “on the whole it is not a major step change” for mortgage advisers. He added: “I’d suggest most mortgage brokers would be doing the basics, acting with integrity, putting clients first etc. Those that haven’t completed level 5, themselves or the entity they work for, will have the transitional period to get that done.”

He said many mortgage advisers would be on the road to a level 5 qualification: “A lot will have the residual level 5 paper and will only have to complete the core. Anyone who has joined the industry in the past five years has been required to show that competency from a product point of view.”

Tags: Code Working Group Dale-Jones FANZ financial advisers Financial Advisers Act

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