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Code creates opportunities for quality mark

Financial Advice New Zealand's quality service mark could be used to fill in some of the gaps in the new Code of Conduct for the advice sector.

Wednesday, May 15th 2019, 6:00AM 4 Comments

The new code has been approved by Commerce Minister Kris Faafoi and will take effect in about nine months.

There has been criticism from within the industry that it is too high-level and principles-based and does not provide enough detail about what is expected from advisers.

That has prompted suggestions that it could be up to adviser associations to provide more prescriptive guidance for members.

Financial Advice New Zealand chief executive Katrina Shanks said the association's quality service mark could have a role to play.

When the association launched, it had been expected that it would develop a mark in the first half of this year that members would eventually be required to hold to retain membership.

Earlier this year, Shanks said the plan had changed and it would be launched later, and renamed - part of the delay was the need to understand what was expected of the code of conduct.

Now, she says the mark will have a place alongside that code.

"One of our key objectives is to build public confidence and trust in financial advice, and to give our members a definitive way to evidence that they are committed to high standards of quality advice - that they are not about just doing the minimum, but rather are professionals committed to excellence.

"The code has provided a principles-based foundation for professional conduct: Now that this part of the new regime has been finalised, we will be assessing the quality mark requirements - the specifics that evidence a commitment to excellence that our members can display proudly as a symbol of their ‘next-level’ professionalism, and commitment to helping Kiwis thrive."

She said issues such as whether there should be a set number of CPD hours and whether a level five qualification were sufficient would be considered.

"When you have a quality standard it is also important you provide pathways to the standard."

Tags: Code Code Working Group quality mark

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Comments from our readers

On 15 May 2019 at 9:27 am popey1 said:
I think the quality mark is a great idea and one way to help quality advisers differentiate themselves from the others.
On 15 May 2019 at 1:13 pm Ron Flood said:
A good idea, as long as the association recognises that some members, already have internationally recognised marks, CFP and CLU.
On 17 May 2019 at 3:12 pm Eyeinthesky said:
I think the quality mark will be a great idea if Financial Advice wants to lose about a significant number of its membership quickly.

If Financial Advice wants to start telling members they know better than the government and regulator, as to what standards should be, good on them in trying to load more obligation on them. But I wouldn't bother wasting my time in such an organisation.
The regulatory environment already sucks a lot of time and effort and administrative effort from us, and now Financial Advice wants to get in on the act.

I don't know of any professions where members of an associated voluntary membership body requires members to front up with client/customer testimonials,as one example of this profoundly odd idea.

An association is supposed to be about and representing the members, rather than some odd self serving requirements in trying to fill a non existent vacuum that is dreamed up.
On 17 May 2019 at 6:51 pm Amused said:
Well said Eyeinthesky.

Associations who start putting their own interests before the industry that they are supposed to represent are not likely to survive going forward.

The trouble with Financial Advice New Zealand just like the PAA and NZMBA before it is that they are now struggling to remain relevant in our industry. For all intents and purposes, the groups have become the new professional bodies nowadays for an adviser to belong to and the new licencing requirements coming soon only illustrate this point further when groups (FAPs) will actually be held liable for the conduct of their members. This is great news for the consumer.

To be blunt if the Government or regulators had seen any benefit whatsoever to the consumer in an adviser been a member of an association, they would have made membership compulsory. They haven’t. The banks and insurers who actually deal with advisers day to day don’t make membership of an association compulsory either to hold accreditation. What does that tell you?

When advisers already belong to a dispute resolution scheme, are registered on the Financial Service Providers Register, hold professional indemnity cover in excess of $1M, and belong to a group (soon to be FAP) with additional licencing costs coming I struggle to understand exactly what an association can offer an adviser (or the consumer) that the above doesn’t already?

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