Strategi Institute has raised two concerns with the recently released draft Code of Conduct by the Code Working Group.
Strategi Institute Managing Director, David Greenslade, says their biggest issues with the draft Code from an educational perspective are:
1. A lack of clarity and prescription around how future licence holders can achieve the equivalent of the level 5 qualification, without actually having their advisers complete the qualification. (Standard 9)
2. No guidance around the minimum number of continuing professional development (CPD) hours, and relevance and quality of that CPD. (Standard 10)
“When there is a lack of prescription around the alternative standards or qualifications, then it becomes difficult for the FMA to monitor and enforce, and the anticipated standards may not actually be achieved,” explained Greenslade.
“Strategi Institute has expertise in ‘recognition of prior learning’ assessing but in many instances, the time and cost to the adviser in this exercise being undertaken is more than just doing the qualification online.”
On the lack of guidance around CPD requirements, Greenslade said this will likely result in attitudes to CPD reverting to pre-2010 with ‘CPD’ considered to be adequately fulfilled by attending product provider conferences and events.
“When there is a lack of prescription around the alternative standards or qualifications, then it becomes difficult for the FMA to monitor and enforce…”
He questioned how the FMA would monitor this when there is nothing to measure it by.
“The lack of focus on the importance of CPD undermines the drive to professionalism of the industry and is contrary to the requirements of other professions (e.g. lawyers, accountants, engineers),” he said.
Although the draft Code has raised some concerns, it has also received positive feedback from industry stakeholders (see: Industry Response to ‘Succinct’ Draft Code) and the majority of advisers who voted in RiskinfoNZ’s latest poll (see: Adviser ‘Thumbs-Up’ for New Code).
Strategi stated it supports the the minimum standard being the New Zealand Certificate in financial services level 5.
Greenslade also said they support the requirement under Standard 12 that if the financial advice provided relates to more than one type of financial advice product, then all relevant Level 5 strands are required.