[GRTV] No back-down from Level Five, Dale-Jones says

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A suggestion that the new Code of Conduct for financial advisers is a back down on the requirement for Level Five qualifications is incorrect, Code Working Group chairman Angus Dale-Jones says.

Friday, May 17th 2019, 6:00AM 1 Comment

The chairman of the Code Working Group, Angus Dale-Jones, says criticisms that the newly-approved Code of Professional Conduct doesn't require advisers to do Level Five papers is wrong.

Financial Advice NZ is one group which took issue with the code's competence standard.

Its chief executive, Katrina Shanks, said the new Code created a two-level scenario, where those working for big providers could have lower qualification standards than others.

Some advisers said it seemed that the code had “stepped back” from an outright requirement for Level Five qualifications.

But Dale-Jones said that was wrong.

He said the competence standard was clearly Level Five, with an open number of ways that advisers could show they had reached it.

But the easiest way to do so would be to attain the qualification.

He said, in every way the Code Working Group could think of, the process and controls that would be required to give advice at the necessary standard without each person being qualified were more difficult than getting the qualification.

It would only suit those who had staff doing very limited advice work.

The standard required for investment planning will be reconsidered, potentially requiring a higher qualification for those advisers. Dale-Jones said it was noticed through the submission process that there was wide variation in what submitters thought was appropriate.

The group was also criticised for not imposing a required number of hours to meet the CPD standard.

Dale-Jones said it was more important that the Code made people think about keeping up to the standard required than was prescriptive.

The group had earlier suggested code standards that touched on business processes but he said a decision had been made to step away from that. “So businesses can choose their own process, we’re not dictating what that should be.”

He said the Code should not become something that led people to a CPD approach of having a webinar on in the background while they worked, simply to amass enough hours.

The group would watch closely to see how that standard was interpreted “whether people read it down or read it up. The intention there is to promote serious thought by the adviser and advice business.”

The Code was different to that under the Financial Advisers Act because the licensing process itself will bring a set of criteria for advice businesses to meet, and the code has to work in conjunction with that.

The Code would bring challenges for some advisers, he said.

People who were not AFAs at present would have to think about how they did things in their business and whether they were able to show the regulators they operated in line with requirements. “It’s not difficult or tough but something that requires careful reflection and thought.

"It won't be enough to say 'yeah, I do that." 

Full transcript is available here.

Tags: Code Working Group

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