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20 hours of CPD? Yeah, right

Some advisers may need to do a lot more than just 20 hours of professional development each year to meet their obligations, industry training body ETITO says.

Wednesday, February 15th 2012, 6:04AM 5 Comments

by Niko Kloeten

Michael Frampton, ETITO manager - strategy and corporate relations, said he was "disappointed" that discussion about continuing professional development (CPD) was focused on the minimum of 20 hours prescribed by the code of conduct for Authorised Financial Advisers.

"I'm concerned the commentary seems to be dominated by discussion about hours when actually, CPD is about maintaining skills that are appropriate for the services advisers are providing.

"And it's not just AFAs; section 33 of the Financial Advisers Act requires all advisers to exercise reasonable care, diligence and skill when giving advice.

"You need to get all the way to code section 18 in the supporting notes before you get to discussion about 20 hours."

Frampton said one of the principles of the code is that before providing a service, AFAs must have the competence, knowledge, and skills to provide it, and must also show they have a reasonable basis for believing they are competent to do so.

"For some advisers it may be that more than 20 hours is required."

He said some of those who could require more than that include advisers who: provide complex or inter-disciplinary advice; provide advice across multiple asset classes; provide whole of life planning; and those who provide a 'comprehensive financial planning service'. 

The debate over professional development is too focused on AFAs, and there is an "unhealthy preoccupation" with 20 hours, Frampton said.

"I feel a little bit like we're not seeing the wood for the trees here - we're bound up in this mechanistic notion of 'have I made the 20 hours?'

"A black letter rules-based approach appeals to that egalitarianism at the heart of the Kiwi psyche, but advisers are not on a level playing field because they are providing different services.

"If advisers find themselves having to defend some of the choices they've made, if they turn around and say, 'I did my 20 hours' I'm not certain that's going to cut it."

He also said ETITO had put together an advisory committee to create a framework for CPD providers that would allow greater comparability between courses.

Niko Kloeten can be contacted at niko@goodreturns.co.nz

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Comments from our readers

On 16 February 2012 at 11:25 am adam smith said:
What a surprise!

A training organisation scaremongering about the need for FAs to undertake even more training.

They wouldn't have a conflict of interest by any chance, would they?
On 16 February 2012 at 12:41 pm Amused said:
100% percent agree with you comments Adam. Remember organisations like the ETITO were "banking" on a lot more advisers seeking AFA status.
On 17 February 2012 at 5:39 pm Graeme Lindsay said:
I agree with both of the previous comments! The rush to offer education for advisers over recent years was almost obscene.

I cannot comment in respect of AFAs, but suggest that the question of CPD for RFAs is interesting. I see the providers of education trying to justify their offering with scare tactics, but have some trouble seeing just why I should subject myself to their stuff. Our clients' needs for our products haven't changed over the years. The only real change have been in product offerings and the insurers provide such instruction as is necessary for us to understand.

The educators justify their position by pointing to medical, legal and accounting professionals, but, when you think about it, their position is different. There are advances in medical knowledge that medical professionals must keep abreast of, changes in the law that lawyers and accountants must understand, but, in the life and health insurance world, there's not a lot new to learn, and I'm certainly not interested in having some academic who has never spent time out at the sharp end, or worse still, a failed adviser, "teaching" me what I have been doing reasonably well for some 43 years.
On 16 March 2012 at 2:46 pm traveller said:
all the technical training in the world won't protect investors from advisers who are without ethics. And that is something which cannot be taught and academically tested.
On 11 May 2012 at 12:12 pm Edward P said:
I think that 50 hours training, and 20 of which is structured would be more suitable to really raise standards in the industry and make AFA a credible designation.
Commenting is closed

 

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