Everyone should have Level 5: Financial Advice NZ

Nominated representatives should not be given any leeway to skip the qualifications required of the rest of the financial advice sector, Financial Advice NZ says.

It was among the submitters who offered comment on the draft code of conduct for financial advice. Submissions closed on Friday.

The code suggests that in some cases financial advice providers will be able to "backfill" their staff's competency. Those who do not have a level five qualification could be deemed to be providing advice at that standard if the provider had the systems and processes in place to fill in any gaps.

But Financial Advice NZ said there should be one minimum qualification (or the equivalent through RPL) for all persons providing regulated financial advice.

“The Professional Code of Conduct will provide a cornerstone for building public confidence and trust. Anything but a consistent requirement for those providing regulated financial advice, right across the sector, jeopardises that: it would impede the ability of the sector to establish the continuity of competency that Kiwis should be able to rely on,” said Financial Advice New Zealand chief executive Katrina Shanks.

“It is impossible for organisational ‘capability’ to be measured by qualification outcomes. If a person – nominated representative or financial adviser – is giving regulated financial advice, then that individual should be qualified to provide that advice, relevant to their role.”

A professional must have continuing professional development (CPD): Financial Advice New Zealand has advocated that both financial advisers and nominated representatives be required to create an annual CPD plan, complete a minimum of 15 CPD hours each year, and maintain a CPD log.

“CPD requirements are personal requirements that underpin an individual’s commitment to professionalism and the key components of that, such as maintaining and building competency and developing in areas of individual importance,” Shanks said.

“The code of professional conduct must uphold professionalism across the sector, and in the current form, it misses the mark. The code will play a key role for the whole sector in setting the tone for what Kiwis should be able to expect from those advising them on their financial options, goals, plans and more – whatever type of advice that may be.

“It is of concern that the code does not reflect the intention of the legislation, which is to be consumer-centric. Surely the code must state that a person who gives financial advice must place the interests of the client first.”

Other areas highlighted in the submission include managing conflict of interest, evidencing advice and extending advice beyond a product.

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