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Calls for responsible lending qualifications for advisers

The Financial Services Federation (FSF) says it is trying hard to overcome shortages of staff in its sector.

Sunday, November 14th 2021, 8:28PM 2 Comments

by Eric Frykberg

One way would be to have better pre-entry training of staff at lending institutions to create an improved career path for them.

The FSF represents non-bank lenders such as Avanti, Prospa, Gold Band Finance, Basecorp and Pepper Money.

The Federation's comments follow a story in Good Returns about serious staff shortages in the industry. The story said the employment website Seek had over 150 jobs advertised for financial advisers and support staff.

Its rival site, Trade Me Jobs had more than 130 positions available in the financial services sector.

The staff shortages covered entry-level and graduate advisers as well as office seniors such as brokers, loss adjusters or product managers.

The problem was described by the former FMA chief executive Rob Everett as "intimidating".

“At the moment, there are fewer people available and those people can demand packages that we can't necessarily pay,” Everett said.

The FSF agrees there are problems, and the upcoming Credit Contracts and Consumer Finance Act (CCCFA), could make them worse because the new law would bring costly potential liabilities for directors and senior managers which could not be insured against.

This could deter good people from entering the industry because of the danger of financial ruin.

The FSF added that Covid produced extra problems due to the difficulties of getting staff in from overseas to make up for people who were unavailable here. 

And there was an additional problem - the whole industry suffered from inadequate training of staff - for example, there was no nationally recognised pre-entry qualification for the industry.   

“We have partnered with the Strategi Group...they have produced two training modules for us on the CCCFA changes,” said the executive director of the FSF, Lyn McMorran.

“And we are working with them beyond this on the CCCFA in its entirety.”

Coping with the CCCFA was one thing, but there were further problems stemming from the whole structure of training in McMorran's industry.

“Basically, all that exists at the moment is on-the-job training...we are not required to have a Level Five national certificate for people to be front line staff.

“But we would like to have a suitable qualification which is a stepping stone for their career.

“We believe there should be a responsible lending qualification that covers things like the entirety of the CCCFA, the Consumer Guarantees Act, the Fair Trading Act, the Privacy Act, money laundering legislation, that sort of thing.”

McMorran said at present, the focus was on the CCCFA but in the long run there needed to be a proper qualification for all aspects of the lending industry, possibly at university level. This would help the whole industry run better. 

In calling for a Level Five qualification, McMorran was referring to a standard half way up the New Zealand Qualifications Framework of NZQA. The bottom level is NCEA One, the top level is a doctorate.

Tags: CCCFA FSF qualifications recruitment

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Comments from our readers

On 17 November 2021 at 12:59 pm Amused said:
Strategi must be loving this. If you don’t think regulation is primarily about third parties hanging off the side of the industry looking for every opportunity to make money then open your eyes.

Responsible Lending rules apply to the bank/lender approving the loan for the borrower. THEY are the lender in the transaction not the mortgage adviser who is just submitting the application on behalf of his/her customer.

Yes as advisers we have a duty of care to make sure our customer can financially afford the loan they are applying for but ultimately the bank/lender been approached for finance decides whether your customer secures the loan.

What's next for this industry? Are we all going to have to complete Level 5 study soon on how climate change needs to be factored into our advice recommendation for a home loan?

I shouldn't even joke looking at what the FMA has sent out this morning about Climate Reporting Entities been required now to produce annual climate statements. Banks and insurers are going to love that and of course we all know it's the consumer who will ultimately end up paying higher interest rates and insurance premiums now for the extra staff hired to keep the bank/insurer compliant with the regulators.

We seem now as a country to be adding layer upon layer of compliance to all aspects of everyday life which only creates jobs that don't actually add any real value to society. Look at the bureaucracy that is the Health and Safety industry nowadays.

On 17 November 2021 at 5:40 pm Matron said:
Almost as good as Strategi's "Bridging the Gaps' course.

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AIA 6.35 5.25 5.45 5.99
ANZ 6.34 5.59 6.05 6.29
ANZ Blueprint to Build - - - -
ANZ Special - 4.99 5.45 5.69
ASB Bank 6.35 ▼4.99 5.45 5.69
Avanti Finance 6.65 - - -
Basecorp Finance 7.25 - - -
Bluestone 6.89 - - -
BNZ - Classic - 4.95 5.39 5.69
BNZ - Mortgage One 6.39 - - -
BNZ - Rapid Repay 6.39 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 6.39 5.55 5.99 6.29
BNZ - TotalMoney 6.39 - - -
CFML Loans 7.25 - - -
China Construction Bank - 5.35 5.80 5.99
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - ▼4.89 - -
Co-operative Bank - Owner Occ 6.25 ▼4.99 5.39 ▼5.69
Co-operative Bank - Standard 6.25 ▼5.49 5.89 ▼6.19
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 5.35 5.85 -
Heartland Bank - Online 4.60 ▼4.79 5.29 5.39
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 6.50 5.60 6.00 -
HSBC Premier 6.34 5.09 5.34 5.59
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 6.00 ▼4.79 5.15 ▼5.69
Kainga Ora 5.85 5.31 5.58 5.97
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 6.00 5.95 6.45 6.79
Kiwibank - Offset 6.00 - - -
Kiwibank Special - 4.95 5.45 5.89
Liberty 4.84 - - -
Lender Flt 1yr 2yr 3yr
Nelson Building Society ▲6.95 5.55 6.15 -
Pepper Money 5.29 - - -
Resimac 5.59 6.54 6.44 6.98
SBS Bank 6.29 ▼5.39 ▼5.79 5.99
SBS Bank Special - ▼4.89 ▼5.29 5.49
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TSB Bank 7.05 ▼5.65 6.09 6.39
TSB Special 6.25 ▼4.85 5.29 5.59
Unity 5.65 4.95 5.55 -
Wairarapa Building Society 6.49 5.55 6.15 -
Westforce credit union - Special - 5.35 5.85 -
Lender Flt 1yr 2yr 3yr
Westforce credit union - Standard 5.85 6.05 6.55 -
Westpac 6.39 ▼5.55 6.05 ▼6.29
Westpac - Offset 6.39 - - -
Westpac Special - ▼4.95 5.45 ▼5.69
Median 6.34 5.33 5.79 5.93

Last updated: 11 August 2022 8:40am

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