Plugging the knowledge gap with CPD

There isn’t a single mandatory CPD point requirement for all financial advisers as the Financial Markets Authority (FMA) does not set a specific number.

Instead, it says financial advisers must maintain their competence, knowledge, and skill by progressively completing learning activities that are relevant to the advice they provide and the regulatory framework.

Kiwi Adviser Network business development manager Warwick Slow says how many CPD hours a financial adviser should be doing is a question that comes up a lot.

He says with the old 15-hour benchmark still floating around, many advisers are using that as a default. But under the existing rules, there’s no magic number.

The new Financial Advice Code comes into effect on November 1 and tweaks the rules around CPD, asking advisers to plan and record learning that is relevant to their practice, but it is non-prescriptive and doesn’t set any hard minimums. It also recognises “informal” learning including reading or self-directed study.

FAMNZ says mandatory ongoing CPD is critically important for mortgage advisers to stay informed.

FAMNZ managing director Peter While, who also heads up the Mortgage and Finance Association of Australia and the International Mortgage Brokers Federation says his concern is that advisers’ knowledge, which may be sound, is not evolving as the industry and rules change.

“It’s exceptionally important advisers keep up professional development hours and unless it is mandated people can be a little bit lax on that.”

Under the existing rules it is up to each Financial Advice Provider (FAP) to decide what’s reasonable. “The key isn’t clocking up hours for the sake of it, it’s making sure your development is actually useful,” Slow says.

He says if mortgage advisers are serious about staying sharp, they are probably already hitting more than 20 hours a year without even trying.

“Why? Because proper CPD covers more than just the code standards. It should include compliance training, business continuity planning (BCP), complaints processes, IT systems, updates from product providers, even listening to relevant podcasts... it all adds up.

CPD training should also reflect the realities of an adviser’s role, Slow says. “A senior adviser running a large business will have different development needs than someone just starting out.”

This isn’t a numbers game, he says. “The FMA wants advisers to focus on growth, not box-ticking.”

Instead of aiming for a bare minimum, advisers should use CPD as a chance to plug knowledge gaps, stay current, and ultimately serve their clients better, Slow says.