Good time for financial planning: Maye

New Zealand’s financial advisers must rise to a new level of professionalism if the industry is to achieve its full potential, the chief executive of the Financial Planning Standards Board (FPSB) says.

Thursday, March 3rd 2016, 6:00AM

by Susan Edmunds

Noel Maye

Noel Maye has been in New Zealand meeting industry groups, regulators and advisers.

He said since the global financial crisis, governments and regulators around the world had worked to put consumers back at the centre of legislation and were demanding more professionalism from the financial planning community.

“It has to happen everywhere in the world,” he said. “What you are seeing in New Zealand reflects what we’re seeing in Australia, South Africa, the UK.”

Maye said the Certified Financial Planner (CFP) standard the FPSB administers was helping to set an aspirational target for advisers as part of that evolution.

At the end of last year there were 162,000 advisers around the world with the CFP qualification, 314 of whom were in New Zealand.

“There’s lots of focus on raising financial literacy, how to restore trust in financial services in general and explain what financial advice has to offer to those who are willing to pay so people are consciously willing to engage in the financial planning process,” he said. “We need to get a strong community of practitioners who want to be part of a profession and get the world out that financial planning is not just for the rich.”

Maye said it seemed likely that in this review of the Financial Advisers Act, the regulator would settle on a level five baseline qualification standard for all advisers.

CFP would exist alongside that as a level seven qualification and would appeal to those who wanted to show they were offering a service above the basic entry-level standard, he said. “Once you set a baseline standard you always have people who want to show they can do more.”

There could also be qualification exemptions in the revised legislation for those who had completed the CFP standard, he said. "It's not designed to be a minimum or entry-level standard. It's sitting above the licensing level. It offers an inspirational goal and delivers a professional aspect."

Eventually advisers could be required to have a degree qualification, he said.

Maye said he expected financial advice to be a growth industry internationally. “Longevity is a huge issue. It used to be that you were born, went to school, went to work for 40 years then had two, five, maybe 10 years in retirement. Now people are living to 100 they might be retired longer than they were working. There’s a great need for young people to get a plan in place early.”

Financial advisers could be considering everything from debt management to KiwiSaver planning, he said. ‘It’s about building financial capability so people can play an active role in their own financial wellbeing,” he said. “It’s a good time for financial planning.”

Tags: CFP FPSB