Leitch: Don't change the rules already
A consultation process on the Financial Advisers Act is a good opportunity to make sure the Ministry of Business, Innovation and Employment understands what advisers actually do, says PAA chairman Peter Leitch.
Wednesday, January 30th 2013, 9:54AM 
5 Comments
by Susan Edmunds
MoBIE has issued a discussion document calling for input on a range of subjects. Financial advisers groups have been holding meetings with the Ministry to discuss it.
Leitch said the people he met at the Ministry were trying to understand the issues that have affected financial advisers. “It’s a genuine attempt to start a period of consultation to understand the consequences, and the unintended consequences, of regulation.”
He said the enduring message he tried to leave with the Minitstry was not to change things too much. He said regulation needed some time to bed in and for everyone to become comfortable with it. “The worst thing is if there’s no confidence.”
One of the questions being asked is: Is the RFA terminology appropriate, or should it be replaced by something less likely to imply a licensed professional status?
Leitch said: “I think they would be foolish to do anything about the word RFA. People ned to be seen as being an adviser.”
He said whether people were Registered Financial Advisers, Authorised Financial Advisers or part of a Qualifying Financial Entity was less important than that they had the confidence to go out and do their job.
He said if someone wanted to obtain insurance, going to an adviser with the right knowledge was the important thing, not whether they went to an AFA or RFA.
But the question proved there had been some discussion about it, he said.
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Comments from our readers
Surely the important point to remember is that the public (i.e. our clients) actually now have recourse to a complaints process with enforceable penalties if an advisers advise or process is found to be wanting. This standard applies equally whether you are an RFA or an AFA.
Similar to John Milner above , I also know many RFAs (but also AFAs), some who are excellent, some just competent and some I would not walk across the street to put out if they were on fire. The complaints process MAY fix this problem; however whether they are AFA or RFA will not matter one iota. There are many far more important problems to solve in this Industry than whether RFAs all become AFAs or some other title.
As Peter Leitch rightly says and has rightly advocated, let this bed in.
Or perhaps RFA's could be forced to state in their Primary Disclosure Statement that they do NOT hold any legislated qualification to give advice.
This wouldn't stop them from telling their prospective clients about any other qualifications, knowledge, experience and applicable skills that they do hold.
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I am proud to personally know some very competent and professional risk advisers. I also know some who have spent many years in the business who just don't make the grade - not at today's standards at least.
The regulations are not here to pick on individuals or groups but to provide confidence to the general public. For this to be achieved we must have standards across the board.
Let's encourage RFA's to get to AFA status, not rebadge them and alienate them further.