by Niko Kloeten
FMA head of primary regulatory operations Sue Brown said the issue came up at a recent conference, where she was asked about use of the various designations and terms by advisers in promotional material.
"I cautioned against use of the initials by advisers to indicate they have a professional qualification. You can't say 'Joe Bloggs, RFA' as if it's a professional qualification or means you're a member of a professional body," she said.
"It means you've made what are a fairly low level of requirements to get there, meaning you're not disentitled by a conviction or by any of the restrictions.
"You've simply added yourself to a list - it doesn't mean you've passed any exams or joined an association."
AFAs and other title-holders such as CFAs are free to use these initials in their advertising as they actually signify some sort of qualification.
Brown said the situation in the advice industry was different to other professions such as medicine and law, where qualifications are required before you can practise.
However, she said advisers are allowed to say they are registered, provided they word it in a way that doesn't mislead consumers.
"You can say, 'adviser who has registered' without implying it's a qualification."
Brown said there were a number of purposes to the financial service providers register: "At one level enables the regulator to know how many people are operating in the market."
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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So… once again the bias from the regulators themselves towards advisers who have chosen to become registered vs. authorised rears its head with comments like this from Sue Brown. There are many experienced mortgage and insurance advisers operating today in the industry that wisely elected not to become authorised and are glad they did not. I for one am thoroughly sick to death of the implication been made by regulators, training associations and professional associations that because an adviser is registered he/she is now somehow less capable than an adviser who is authorised. Do these people think advisers are ignorant to the agenda been pushed here?? All of the above organisations mentioned above have a vested financial interest in seeing as many advisers become authorised as possible…
I like many other mortgage and insurance advisers who are registered (RFA) looked long and hard at the supposed benefits of AFA status to our clients and businesses that were touted by the regulators last year and wisely did not go down the path of becoming authorised. I’d be surprised to hear of any adviser who can honestly say been authorised has since seen them inundated with new clients flocking to the acronym “AFA” on their business card or website. I hope mortgage and insurance advisers that don’t give investment advice but still opted to become authorised enjoy completing paperwork for the FMA because that in all likelihood is all they have accomplished to date.
As for suggesting that my saying to a client I’m an RFA might confuse them a) no client in his/her right mind would not then ask their adviser what RFA stood for and b) no client I have come across since July last year has the foggiest idea regulation of the financial services industry even took place not mention what FMA, AFA, RFA or QFE might happen to stand for!
P.S. Since when did belonging to an association make an adviser any more ethical or knowledgeable than an adviser who doesn’t belong to a professional body? All of the recent mortgage brokers in Wellington who have been in the news for various indiscretions were either past or present members of the NZMBA or PAA at the time of their offending.