Complaints of fear mongering by financial educators rejected

Complaints have been coming in about training establishments putting undue pressure on mortgage advisers to take new courses to meet FAP requirements.

One adviser actually accused the financial education industry of “scaremongering” by telling them to take new training courses or risk being shut out of the industry by the Financial Markets Authority (FMA).

The training industry, though, reject these claims and say they are simply doing their job.

The complaints have come as time runs out for advisers to get full licensing approved under the FAP programme.

While many established advice firms were licensed months ago, only a minority of all Financial Advice Providers have either got their licence or even begun applying.

According to the complaints, training establishments have taken advantage of the stress caused by the looming FMA deadline and the worry that advisers will be unable to cope.

They have used this anxiety to push for more business.

The complaints about financial educators get some measure of support from one long standing adviser, The Lending People general manager Andrew Scott.

“They have created a lot of fear mongering by saying that if you have the old Level Five qualification then you should really do a gap course to bring you up to speed with the new Level Five qualification,” Scott said.

But he said this claim clashed with the actual rules.

“If you look at the code, it is specific, it says an adviser can demonstrate competency either by having the old Level Five qualification or the new Level Five qualification.

“There is no requirement to complete a specific gap course.”

However two big education players said there was no fear mongering at all – instead they were just doing their job.

Professional IQ College, said advisers had to prove their financial competency and his company existed to help them to do that.

Partner Tim Larkin, said under the code, there was a new regulatory environment and their advisers had to be aware of it.

Larkin said his company had been approached often by people wanting help and it did not put pressure on anyone to do its courses.

“I would not see that as scaremongering at all, I would see that as filling an immediate need that advisers are calling out for.”

According to Larkin, his firm was filling a gap in the knowledge requirements of Version Two of the Level Five Certificate of Financial Services compared with those of Version One.

Strategi, also rejected any suggestion of fear mongering.

Chief executive Daniel Relf, said all advisers would have to be able to demonstrate competence, knowledge and skill by March 15 next year.
“There are other ways of getting there, but the quickest and easiest way is to complete the New Zealand Certificate of Financial Services, Level 5, Version Two,” he said,.

“If they do not complete this by March 15, next year, they can no longer provide financial advice.”

Relf said he was not scaremongering, his company was a mouthpiece providing the required information.

“People cannot claim that this is new to them, they cannot claim that this is scaremongering.

“They cannot claim we are just trying to drum up business, this has been made very clear for four years.”

Some advisers have suggested that the real trouble is that passing a course on Version Two would gradually become the default way for the FMA to assess competency.

Other methods would prove time consuming and expensive and be open to too much challenge for them to last for very long.

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