Minimum competency standards are only the beginning

The minimum competency standards for financial advisers are only the beginning to get the ball rolling and future changes are on the horizon, according to the Code Committee.

Thursday, October 29th 2009, 5:49AM

by Paul McBeth

At a meeting in Wellington to discuss the committee's discussion document on competence, chairman Ross Butler told the audience it was quite clear that "at some stage in the future" tougher standards will be introduced and that the current regime being implemented is to set up the framework to stop the process from being stalled.

"We just want to get things started at the moment," Butler told the meeting. "We don't want to drive people out of the business" by raising the bar too high to begin with, he said.

The committee hinted at tighter requirements in its discussion document out last week, but Butler was more open in saying the current settings are to build "the initial framework." Future additions will likely see different types of adviser classes with differing training requirements.

The committee took on board concerns from advisers that the current regulation does not allow for people training to be advisers to provide services to customers and excluding them from achieving the education requirements, and will look at options to address this, such as creating a provisional class for advisers in training.

ETITO manager strategy and corporate relations Michael Frampton said he would expect an adviser with no knowledge of the sector would take between 12 and 18 months to complete a level 5 qualification under the NZQA framework.

Frampton said that ETITO will not assess advisers itself; rather it will train people in the industry to take up the role. As the system is a regulatory one, people will not be able to assess advisers within their own company, although a member of the audience raised concerns that he would not appreciate a competitor being able to snoop through his company's books.

Paul is a staff writer for Good Returns based in Wellington.

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