Call for education to top FAA review checklist

Any moves to require a higher level of education for financial advisers in the review of the FAA are likely not to go far enough, says Massey University’s director of financial planning.

Tuesday, May 26th 2015, 6:00AM

by Susan Edmunds

Janine Scott said it seemed that the Ministry of Business, Innovation and Employment was moving towards the level five certificate as a minimum standard for all financial advisers.

At the moment, registered financial advisers are not required to have any qualifications. But she said the level five certificate was not a high enough standard.

“Looking at worldwide trends, level five is really not sufficient at all. It won’t help promote professionalism in the long run. That’s what we’ve been discussing [with the Ministry]. That’s the stance we’re going to take.”

Scott said she was aware that some might criticise her stance as being self-serving, because Massey offers a level seven diploma. But she said a higher standard of education was becoming the norm for advisers throughout the rest of the world.

Massey is still considering launching a financial advice degree but Scott said it would have to wait until the FAA review was complete, to determine whether it would proceed.

“That will inform whether or not we have students enrolled not only in a future degree but in our current diploma.”

The number of students on the level seven diploma had dropped since level five was made the legal minimum standard for authorised financial advisers.

Scott said most industry participants would only do the minimum required.

Only those who took a long-term view would look to do further study, she said. “They want to elevate the profession and are cognisant of what’s going on worldwide. Those are the ones who sit through the diploma because they see the result of the adder value in the long run and won’t wait for regulation to whip them into shape.”

Education was the most important aspect the review could address, she said, ahead of other issues that have been flagged such as remuneration structures.

Tags: qualifications regulation