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.
