Naylor explains why a Level 5 qualification is too low for quality financial advice

The basis of Massey’ submission to the code review is that adviser education has to be seen as an increasing sequence, rather than a one-off pass-fail set-up. There cannot be any simple code requirement.

Instead there needs to be an explicit layering of skills, with an explicit requirement to refer up the chain if required. This can be compare to that operating in medicine; of nurse, GP, general specialist, advanced specialist, then national expert. Patients are initially assessed at the lowest level, then referred up depending on complexity.

The NZQA Level 4 curriculum is aimed mainly at administrative staff while Level 5 is aimed at advisers who can handle general cases, but who have higher-educated senior staff who they can refer difficult clients to. The Level 5 curriculum carefully excludes any areas requiring complex or skilled knowledge and visualises the clients of Level 5 educated advisers as middle-income families with limited complications. All complex or customised advice cases are then visualised by the NZQA framework as being referred to a Level 6 or 7 educated adviser within that organisation or via external reference.

In practice this means that Level 5 graduates will not be able to handle areas like; business insurance, commercial property insurance, insurance involving complex underwriting, the selection of shares or the creation of portfolios, commercial lending, etc. The pedagogy of Level 5 is focused on teaching of knowledge with a limited amount of conceptualisation and application. This means that a key aspect of teaching Level 5 graduates is to ensure that they can recognise clients who have needs which require more advanced advice and therefore should be referred.