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QSM on hold for now

Financial Advice New Zealand is rethinking its “quality service mark”.

Monday, February 25th 2019, 6:00AM 12 Comments

Katrina Shanks

Financial Advice New Zealand is rethinking its “quality service mark”.

Early last year, the association said the mark would be the mechanism through which it would evidence and endorse to the public the professional standards of members.

It said at the time it would be launched to the public in early 2019.

The mark would be optional for the first five years and then compulsory for all members.

It was criticised at the time because members questioned how it would fit with the CFP designation that some investment advisers have.

The number of CFPs in New Zealand is roughly equal to about 15% of all AFAs.

Financial Advice NZ took over the oversight of that mark from IFA.

Others asked how the association would balance the need to promote advisers with the mark without disadvantaging those who did not have it until it became compulsory.

Now, Financial Advice New Zealand chief executive Katrina Shanks said the plan had changed. She said a quality mark would still be launched but it would be later than expected and it would be renamed.

She said work was in progress but her association wanted to get it right.

Part of that would be to understand what the new code of conduct would require from advisers.

That is yet to be revealed although the Code Working Group still plans to submit it to the Commerce Minister early this year.

Shanks said she hoped to have a draft for the quality service mark this year.

Tags: Financial Advice New Zealand quality mark

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Comments from our readers

On 25 February 2019 at 10:13 am smitty said:
Not a great look. Off the top of my head QSM at first glance means I might be on the honours list... Wait, no thats the wrong designation.

Seriously though, since the merger, I haven't seen one change in the marketing of CFP or CLU. I've seen a lot of articles on buying your first home?

Again, and it has been mentioned here before, perhaps FANZ should give up its hold on CFP / CLU and allow another organisation that is dedicated to those two charterholder designations?
On 25 February 2019 at 4:45 pm Simon H said:
The biggest challenge taken on by Financial Advice NZ was always going to be satisfying the needs of such a diverse membership base.

While its CFP (and a smaller number of CLU) members might struggle to make up 20% of its total practitioner membership, they are clearly among its best qualified professionals. They hold its premier credentials. And those with the CFP mark also wield power.

The way things are now, its CFP members may have the strongest reason to belong to Financial Advice NZ. This is because Financial Advice and its predecessor bodies opted to make membership a pre-requisite for getting – and keeping – the CFP credential in NZ.

So – for now – Financial Advice NZ and NZ’s CFP practitioners need each other. But under the terms of the agreement under which financial Advice NZ is licenced to award the CFP credential in NZ, if a significant group of CFP practitioners requested this, control of CFP in NZ could move to another body.

CFP professionals have achieved a globally recognised credential, representing a commitment to high professional standards in financial advice.

Just as organisations wanting to make senior advice and leadership roles should be looking at CFP professionals, Financial Advice NZ needs to recognise and promote those holding its premier credentials, and encourage others wanting to advance their careers to work towards these.
So when it comes to defining and positioning a “quality service mark” Financial Advice NZ will need to find a balance between promoting its premium marks, and providing meaningful mark for others.

(Simon Hassan is a former CFP and CLU professional, now retired, He currently chairs Financial Advice NZ's Certification Committee.)
On 25 February 2019 at 11:17 pm said:
So the 15% is apparently superior to the other 85% by virtue of holding a CFP or CLU designation. Perhaps it is time for the 15% to consider pushing off and setting up their own exclusive CFP club. I assume they won’t want to invite the CLU’s along for the journey so the 15% may water down to the 11.75%. The 11.75% can then pat each other on the back and proclaim look at me, look at us, we are apparently more superior to the other 88.25%.
On 26 February 2019 at 9:09 am smitty said:
@mike6156, I cant remember reading in any comments, either in this particular strand or others, that we proclaim ourselves as superior. We do however value our careers and our roles, having committed time, effort, sacrifice (in any form) in order to achieve a designation that is recognised globally as the standard to achieve. It has nothing to do with being superior, it has all to do with wanting to show that one is committed to an industry and is passionate about advice, and is comfortable being held to a higher standard (and before you say it, I am not meaning superior work or advice, I am referring to the fact you have two codes of conduct, well three if you include a CFA membership). My complaint is that since attaining CFP I haven't really seen too much in the way of marketing to the NZ public that it is the pinnacle designation. Thanks Simon for your comments. Mike6156, slightly tall poppy perhaps?
On 26 February 2019 at 9:18 am Ron Flood said:
Mike6156, it is not about being or feeling superior to any other adviser, it is about getting off ones bum and getting a specialised industry recognised qualification.

I liken it to that of a specialist in the medical field, who decides to upskill from being just a GP.

Over the years, I have seen many advisers who reluctantly upskill, as regulations require it of them. Those advisers who have obtained the CFP & CLU marks, have upskilled of their own accord, without being forced to do so.

Many advisers do not want to spend any time or money in upskilling, which is a shame, as there are avenues out there available to them, CFP & CLU, being just two of them.

Ron Flood
Chartered Life Underwriter
GradDipBusStud (Massey)
(Personal Risk Management)
On 26 February 2019 at 1:45 pm Bruce Cortesi said:
As one of the rare breed who was on the journey of Financial Advice NZ way before it was given its birth rights, I have a few insightful comments to add into the mix which formed the reason the two previous bodies got together in the first instance.

When we first had the conversation, the CFP and CLU designations were already in existence, and those designations were not the reason PAA and IFA got together. I can also confirm to you that it was not the state of the adviser force either that was the catalyst for both bodies to come together.

It was a total new look at the profession, and acknowledging everyone - all stakeholders, including New Zealanders and the greater public.

This was a very new approach to designing a professional body for our industry as previously it was very introverted and contained within the industry itself. I use the word industry because we are not yet organised enough to be called a profession - and it is not qualification alone that determines the professionalism of a person or being - it is the character and actions and contribution it makes to all stakeholders.

I doubt any learned person would challenge that as we have seen many highly qualified people in many professions, including our industry taken to task for unethical behaviour. Education does and never will remove unethical behaviour.

Clearly we have a fractured Adviser fraternity if they only care enough about their own qualification or operation and not that of the wider industry.

We wanted a new professional body that encourages all Advisers to upskill - RELEVANT to the discipline they choose to work in and that they are passionate about. I also find it disrespectful of a CFP Adviser to state that all Advisers should aspire to obtain that qualification. If Financial Planning is NOT your thing, then you should be able to obtain a higher recognised professional mark relative to what you are passionate about in this industry.

Passion keeps people in this industry. The opposite is also true that a Mortgage Adviser for example should not criticise those who have worked hard to obtain a higher mark of professionalism such as CFP and CLU - and are proud of that - and I applaud that. The blueprint and mandate for Financial Advice NZ was to setup a new professional mark that would encourage all Advisers to attain a higher standard relevant to their chosen discipline. Understand what the code is going to be going forward yes, but the code is always going to be subject to change.

The Regulator and other organisations will be responsible for the monitoring and/or disciplinary process in that space. Financial Advice NZ has the necessary skills in place in its Board, Member Adviser Committees and the wider Adviser fraternity to develop this Quality Mark, which is about behaviour, character and outcomes for New Zealanders and as a member of the Professional Body.

We did an extensive set of roadshows prior to Financial Advice NZ being launched to learn from members what this looked like. You all had your say then and told us loud and clear - on record.

It is critical that members are taken on the journey of developing this professional mark. It was one of the benefits I signed the dotted line to become a member.

Government - whether national or local are not noted as the most efficient in delivering outcomes. Financial Advice NZ was not designed to be a blueprint that piggy backed off Government timetables.

If this occurs then it too becomes inefficient and cannot deliver as the two previous bodies were. Financial Advice NZ has a very capable team - a CEO that communicates with membership, and a very capable Board as previously mentioned.

Whilst I understand the preference to wait for the Code and other legislative outcomes, Financial Advice NZ would have my underlying support to get this Professional mark, as presented to members and with input of the members of the founding bodies underway as previously timetabled. I also encourage all members of Financial Advice NZ to support the CEO, Board and MACS to achieve this.
On 26 February 2019 at 3:40 pm WilliamAdvice said:
Bruce, you articulate yourself very well. However, you have missed in my opinion the leadership position that FANZ needs to take on my/our behalf, which is the collective voice on behalf of all advisers in selling our value proposition to government, media and the market. I feel like FANZ has left us high and dry, to fight for ourselves, when we really need you to champion the wonderful things we do for people. SELL OUR VALUE PROPOSITION! Make sure all stakeholders understand our value and that the mongrels are few and far between!

As for the QSM, I don’t know what to think… having a plan and a dream is all well and good but executing on the plan and delivery is what really matters. I see the dream, but I question the ability to deliver.

Stop standing in the shadows, come into the sunlight, throw yourself at the big issues, show me I should join association through actions and results rather than “planning”.
On 26 February 2019 at 6:16 pm Bruce Cortesi said:
To Williams/Advice - thank you for your comments, however, I stood down from Financial Advice NZ last year. However the passion behind your comments I do agree with. We all have to take some responsibility - and that excites me!
On 27 February 2019 at 8:42 am JPHale said:
Well said Bruce!
On 27 February 2019 at 9:19 am regant said:

Would you care to spell out "the big issues" as you see them?

I'd be happy to bring them up with the board for you, if they are not already being worked on.

Most of the stuff we're seeing posted in places like this forum is self-feeding speculation.

Commissions are not at risk, and apart from some foolish comments made by some politicians there has been very little talk about them. What the Conduct and Culture report actually called for was that commission and incentives be structured in a way that responds to the needs of customers. Most of what we've seen from people that matter was supportive of what we do as advisers. Reports by FMA have found very little evidence of soft-dollar influence, or of churn and mis-selling. Could it be that these comments were intended for VIO and direct type sellers?

Are you really "high and dry" and left fighting? Fighting who? Fighting for what?

We're not at war here.

So no, you are unlikely to see hard-hitting writings and sound-bites because we're not "fighting". Working diplomatically doesn't happen that way. It happens in one-on-one engagements, over coffee and through meetings. It happens when you engage with groups of like-minded represenatatives. It takes the form of carefully considered submissions when they are called for.

And I, my MAC, and Financial Advice New Zealand have been a part of all of these things.

That's why you should join. Because then you'd already know that.

Regan Thomas

Chairman, Member Advisory Committee - Risk
On 27 February 2019 at 1:26 pm Tash said:
What does a QSM based on "behaviour, character and outcomes for New Zealanders" mean? Behaviour (conduct) is prescribed by the law and the code, character is inherent and cannot be 'taught' and what outcomes?

I am sorry Bruce but you have not convinced me of the merits of a 'QSM' you explained. The CFP qualification on the other hand, is a qualification which, when I did it, was very technical and focussed on details and skills required to generate the advice we give, exactly the understanding and skill I think we need to improve on as an industry if we want to become a profession. If the QSM aids better advice then it will be valuable.
On 28 February 2019 at 10:24 am Bruce Cortesi said:
Interesting feedback and comments Tash. You have a passion for the industry which is fantastic. Their are many other Education qualifications that provide the equivalent and more in respect of skillsets you refer to. However, a CFP or any University Qualification does not prevent bad advice or poor outcomes for Consumers as we have seen in the past. As previously stated, why would a Mortgage Adviser do a CFP? Why would a Fire and General Broker also caught up in the new regulatory regime do a CFP? I am not saying that CFP is not worthy of serious consideration, it absolutely is to the right person, but to do it based on adding relevant technical skills alone when many Advisers have the relevant technical skills to do their job is not going to see a massive upswing to attain a CFP or CLU equivalent qualification. That is the apathy we have within. Utopia is all Advisers wanting to start a journey of upskilling where necessary, and relevant to the advice stream they are working in. When you have an average Adviser age of 50 plus, we need to actually start focusing on how to promote this as a profession - and education is not the only thing that achieves that. We have to promote the value it provides New Zealanders, we have to promote it as a career to young people in a way that they can relate to. Heaven forbid we have more Advisers on the Gold Card than entering the industry! Our industry has in my opinion been lazy and irresponsible in this space over the last two decades. We have allowed that to happen. I believe we must all come together and all help everyone in this industry - we are all responsible for that. We have all been sitting on our backsides for a long time doing our own thing, and now we need everyone to actually contribute in a positive way for everyone. I have heard the same broken record for the last twenty years - a needle stuck in a groove. I do agree with your comment that the QSM must aid better advice and outcomes. I also refer to the Risk MAC, Regan and totally endorse his comments, many people are out their pointing fingers but not prepared to step out of their business and actually work for and on behalf of the industry to make a positive difference. To coin a phrase - a little goes a long way. If we just have forums that agree or disagree but are not followed up by action then all we do is tread water. I have come across many who "look but they do not see, and listen but they do not hear" which has been symptomatic of this industry in the past. Thank you Tash for contributing to this forum which I think is valuable - and I wish many other Advisers would also participate....clearly we both want the same thing - but maybe have a different perspective on the journey to achieve it - if many others contributed we might just get it right.

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