Level 5 certificate to remain the minimum requirement for advisers

Angus – thank you for common sense prevailing, and yes – I agree – to a greater or lesser degree, professionalism is an attitudinal thing.

I also agree in a general sense that we should all be looking to continually improve ourselves, our knowledge and the advice and value we give to clients. I also think actual experience is underrated, with an emphasis now to technical qualifications which has resulted in many seasoned, often more highly qualified and valuable advisers walk out the door in the last few years shaking their heads. How has that helped the public……….

However, a suggestion for Mr Hake: you are the Chief Executive of a MEMBER association. You are there to represent membership interests. If 76% of members say one thing, and 21% say something else, it is not for you to side with one group above another, unless a majority themselves determine a change is appropriate or necessary. Like your predecessor was supposed to know, your role is not to advocate on behalf of interests outside the association, i.e. the public, the regulator, educational facilities, self, etc.

If “None of us want the minimum”, firstly, who is the “us”? as the member survey results quoted seem to suggest something different to your statement.

I’ll play this silly game for a bit – let’s say we raise the bar and that a PhD becomes the minimum requirement for giving financial advice in New Zealand – no more of this CFP thing, ( some people with 6 papers done in the Diploma – if they did that a long time ago - some with 8 papers in the Diploma they did it more recently (we didn’t hear much about that difference, now did we?). None of the CLU stuff anymore – a PhD is it – that becomes the minimum standard. How long before someone comes along and states that this new minimum standard held by the one remaining qualified adviser in the country, isn’t enough?

I would imagine somewhere, some group that has a vested interest, would suggest it isn’t enough.

Oh – and what is professionalism? I thought this definition may be useful to you, Mr Hake - This is how we “have to earn the right” to be called one;

Professional ( Merriam Webster Dictionary)
adjective
: of, relating to, or characteristic of a profession
: engaged in one of the learned professions
: characterized by or conforming to the technical or ethical standards of a profession
: exhibiting a courteous, conscientious, and generally business like manner in the workplace
: participating for gain or livelihood in an activity or field of endeavour often engaged in by amateurs
: having a particular profession as a permanent career
: engaged in by persons receiving financial return
: following a line of conduct as though it were a profession
noun
: one that is professional
especially : one that engages in a pursuit or activity professionally

I think the majority of advisers are doing the right thing for their clients.

I have accepted that for a single area of advice, the level 5 is going to stay, however if we then start to advise on a range of areas (Integrated advice) we should be required to be held to a higher threshold, as this starts to delve into the area of Financial Planning rather than simply financial advice.

If we are to become a "Profession" we need to be setting higher standards of formal education/training, according to the Cambridge Dictionary "a profession typically refers to a path that mandates individuals have specialized skills or knowledge. Professions often require education, certification or licensing.

Professions are broader than job titles but not as broad as an occupation". This whole area was the dissertation of a PhD thesis by Dr Deen Sanders (Australia) who studied and was involved in our profession for many years.

My submitted proposal was to retain level 5 for individual elements of financial advise but raise the required standard to level 7 for integrated advice (Financial Planning).

Equally holding the confidence of the public is also important to be recognized as a profession (Doctors, Lawyers or Accountants) and a simple level 5 certificate doesn't in my view reach this standard.

Angus stated in Cambridge that Financial Planning had not been defined, even though the practice was clearly defined in 1973 and has been the cornerstone of the FPSB since its international inception in 2004.

@comprehensive planner: many advisers cannot define or even understand financial planning.

i think the route to being a financial adviser could be similar to that of doctors, lawyers and accountants. the training / education starts with understanding financial planning and its application. then the individual advisers decide the area of specialisation - life, general, investments and/or lending. much like in the medical field, where one study to be a GP first, then either remain as a GP or further study to specialise as cardiologist, ophthalmologist, neurologist, etc.

currently, advisers go straight into study in a specialised area without needing to understand the other areas in personal finance which also includes estate planning and cashflow management.

i don't think it's just doing L5 or L7 or a masters programme. advisers need to understand and know how to apply the different areas in personal finance to help their clients "trouble-shoot" and approach the problem in a comprehensive manner. it could be a team of advisers with the different expertise - just like what some advisers are already doing, working in collaboration.

for this to happen, the code committee should comprise of people who have vast practicing experience, knowledge and a heart in the field of personal finance.

Well said W K. I Agree. The idea of coming in as a specialist and then becoming a generalist without a basic understanding of the market is backward compared to how every other profession works.

Starting with a broad but simple education base and then specialising from there is an appropriate way to tackle this. Then, as people gain experience and understanding, they can better define what further education they need.

Specialty in a field only comes through improved competence, the same way the medical system works and other professionals tackle it.

The idea is that a base understanding of the financial system and what makes up the components of the financial system are critical to all disciplines and specialties working together for the same client-focused outcomes.

Any education standard that rushes to advice in a specialty area likely lacks perspective and focuses more on sales than advice as a result.