KiwiSaver managers who pay the most see the most flow from advisers. Somebody famous said, 'show me the incentive, I'll show you the outcome.' It's amazing that all this still goes on.

From my endeavours over the last three years, I’ve noticed a few unhelpful issues which hold advisers (life advisers anyway) back from improving their knowledge and craft – giving advice – and which leave their advice wide open to criticism. 1. Many do not see the need for further CPD after level 5. This appears to be largely because they do not yet have sufficient understanding to recognise their own areas of incompetence (I’m not being unkind – they simply don’t know what they don’t know but really should). Everyone thinks they are an expert when they don’t know the extent of their knowledge deficiency. 2. Advisers who have been around for a while appear embarrassed to ask for help – no one needs to feel embarrassed about knowledge deficiencies – we all have them. Discovering them and doing something about it is the professional thing to do! 3. Sadly, some simply do not seem to believe any consequences will flow for unsuitable advice. (Paul Flood: Complaints to Dispute Resolution Schemes are a larger concern for me than the FMA) 4. The way our legislation categorises advisers doesn’t help. All advisers need a broad ‘working’ understanding of all the various disciplines (investments, life insurance, debt and mortgages, retirement planning, estate planning, wills, EPA, Trusts, contract, corporate and tax law etc). Not so much that they can give advice on these, but enough to properly allow suitable advice in their own sphere of competence and make suitable referral suggestions. 5. Advisers continue to give advice as they always have, whereas now much more is required to demonstrate suitability of advice and that sufficient information has been given (so that clients can make informed decisions). There is still too much product selling and not enough advice. Don’t get me wrong, selling and sales skills are critical but there is a difference between selling products and giving advice. 6. FAP heads and senior managers have a particular motivation for ensuring their advisers get suitable CPD/training/coaching and from suitably skilled sources because their ‘fit and proper’ person status could be at risk. I’m not sure all understand this. 7. There is not enough peer review and peer review from someone outside the adviser’s normal circle (who probably have similar views and thoughts). A devil’s advocate can be your best friend. 8. Sadly, I’ve reviewed files that have been ‘signed-off’ by compliance officers with severely deficient advice, probably simply because the compliance officer was not an adviser and knew very little about risk needs and was no product expert. Intellectual humility makes us smarter, intellectual arrogance keeps us poorly informed. If we truly want to become knowledgeable, we need to be intellectually humble, adopt a ‘growth mindset’ and be open to challenging our own beliefs and views even if that feels uncomfortable. Being poorly informed is not bad, staying so purposefully is. The ancient Greeks called this ‘Amathia’, so it’s nothing new, but is it sensible? Wilfully ignoring reality to avoid discomfort and protect an indefensible position does not seem to me to be a luxury professionals can afford.

Well said Angus. Sadly, many in the industry have been dragged, under duress, from proudly advising they are “Registered Advisers”, to now “Financial Advisers”, by merely completing the core strand of Level 5 and one strand of their particular specialty. This of course is merely an entry level qualification. I do have to disclose that I completed level 5 myself in 2007, while completing the business diploma in financial planning and risk. Back then it was known as the National Certificate in Financial Services and I was required to complete all strands to receive the certificate. Although we have approximately 200 CFP’s in NZ, we need far more. As David Greenslade spoke of at the FANZ tour today, many clients have complicated financial lives and that requires much more than an entry level qualification. Although FANZ did a great job of promoting further education and the CFP designation today, they may struggle when the government is happy to badge all in the industry as one - Financial Advisers, and make it hard for the public to distinguish a professional from the interns.

What do you expect? People who don't have practicing experience in an advisory and sales role dictates how an adviser should be trained and how advice should be provided. I had an unfortunate conversation with one in the code committee working group who does not even understand financial planning concept. An overhaul of the committee and working group and training programme is definitely needed. Would anyone have confidence in a surgeon whose surgical procedure is being regulated people who have never operated on a patient.

Expensive, a single monopoly provider, bid-ask spreads you could drive a tractor through, high brokerage, no ecosystem (i.e. market makers, authorised participants), no institutional adoption, poor index replication (e.g. ETFs holding other ETFs), tax settings that are disadvantageous... It's surprising the regulator hasn't looked more closely at this. We had ETFs in the mid-1990s, before Europe, Aus etc and the total market size is like $5B 30 years later. Amazing that more people don't ask why...