As the financial services sector undergoes sweeping changes, Rod Severn from Professional IQ College writes that now is the time for advisers to knuckle down and make sure they meet the requirements under the new regime for financial advice, as quality advisers will be needed now more than ever…
The financial services sector has been overwhelmed lately with legislative change, tightening, loosening and then tightening of regulatory lending policies, housing boom-bust cycles and now FSLAA, the Code of Conduct, Insurance Contract Law Review, the enforcement of qualifications and a review of the advisers earning capacity via a review into commissions and soft-dollar incentives. All in all, some might well challenge the reason to stay in, or even join the industry right now.
Then there is the discussion around whether we are a profession or an industry. Continuing to challenge our standards and find ways to improve and grow is never an easy option. To do this, we need to be aggressive with our standards and compliance, character and effort and be bold enough to see the future and not give in. Change is inevitable. We need to confront it, not hide from it, and be willing to take on the opportunities that are presented with those challenges.
When we look at what makes up a bona fide profession, the hallmarks are typically:
- A unique and specialised body of knowledge that is not generally accessible to the public
- It usually requires advanced schooling from a university or higher education body
- Proof of outcomes so the public are assured the adviser has learned their craft and can apply that to their role
- A recognition from the public that this craft is a necessity within the community
- Ethics, client care and competence are all demonstrable
- A binding code of conduct that defines what a professional practice looks like and the disciplinary rules and regulations behind it to ensure those who do not ‘scrub up’ are treated accordingly
- Membership to a professional body that represents the sector in terms of lobbying, ongoing professional development and networking
- A profession that actually controls the use of its designations, so the public can clearly distinguish between the professional and those claiming to be so
- A defined and recognised program for ongoing professional development
So, do you or will you meet the above criteria? For many advisers in the field right now there is a choice to make. Do you, over the next two and a half years knuckle down and get your house in order, or do you swing in the breeze and then hang the ‘for sale’ sign out the front and retire or look for a new job?
In my view now is a great time to knuckle down. There will be some attrition, no doubt, over the next few years, so there will be a real need for quality advisers to continue to help New Zealanders achieve a better financial outcome. New Zealanders need you. You need them. There are plenty of them to go around.
Those that get their house in order early, get educated and qualified will be the ones who will lead this industry into a profession
And this is not a difficult industry to become ‘professional’. At most it will take a new-comer to the industry approximately 12 months to attain the minimal acceptable standard to becoming a financial adviser i.e. Level 5. A hairdresser takes three years. Most trades are three to four years. Doctors, lawyers, accountants much longer. If you have been in the financial services sector for some years it should only take you around 200 hours!
Professionals invest in themselves. Personal and professional growth is pursued constantly. Yes, it takes time, effort and money but it does pay off and it will far exceed the cost.
Education isn’t just about learning something. It’s about developing that edge that makes you stand out in the crowd as a knowledgeable professional.
There is real value in education.
Rod Severn is Chief Executive of the Professional IQ College, a leading provider of professional training and ongoing education to the insurance and finance industries throughout New Zealand.