[OPINION] Proposed two-tier system has major flaws

The Review’s final report has some laudable aspirations to provide better access to financial advice and reduce complexity.  The sad reality is that clients of advisers will probably not understand the distinction between ‘adviser’ and ‘agent’ any more than they did between AFA and RFA and QFE adviser.

As DC Whyte points out there well could a flight of advisers into ‘agency world’ to avoid the very real issue of the adviser’s personal (and legal) liability.  Why not reduce your business risk by transferring liability to the financial advice firm?  I know many lawyers would advise this.

No doubt the 6,500-some RFAs will have to get qualified over time, or prove via the tried-and-true NZQA process of Recognition of Priority Learning - their competency in the ‘prescribed courses which will be deemed to comply’ (page 71). 

This process is yet to be determined by the Code Committee – but surely the Code Committee won’t overlook the current vocational pathway for AFAs - the newly developed NZ Certificate Level 5 in Financial Services with its eight industry strands (including banking).