Higher standards for RFAs a must for financial advice 'profession'
It seems likely that those who are operating as unauthorised but registered financial advisers will be required to meet new competence, ethical and disclosure standards in a new version of the Financial Advisers Act (FAA).
SiFA submitted on the recent FAA options paper from the Ministry of Business, Innovation and Employment, asking what harm such a move would try to fix.
“The poorest reason for raising the regulatory bar for non-investment financial advisers is because they are now regulated differently from investment advisers. Surely you should be demonstrating problems and harm before even starting to consider regulation."
But Stephen O’Connor, an adviser, member of the Financial Adviser Code Committee and former president of the Institute of Financial Advisers said that seemed to fly in the face of efforts to move towards a profession.
“I’ve been thinking about whether people actually want to see financial advice recognized as a profession. It makes me wonder when some people are arguing for some advisers not to be subject to competency requirements.”
He said financial advisers needed to grow up as an industry and look at a wider picture for the long-term future of the industry. “There’s a bit of disrespect and infighting instead of all getting in the same canoe and rowing in the same direction.”
He said consumers deserved better. “Whether they have the expectation is a different story. I don’t know what they expect but to a degree they deserve better.”
All advisers should have a minimum competency standard, he said. “So there’s no confusion about who is or isn’t a financial adviser.”
Some could then strive to meet higher qualifications too.
But Murray Weatherston, one of the authors of the SiFA submission, rejected the suggestion that RFAs needed higher standards is financial advice was to be a profession.
“Without deprecating the advisers, I doubt that anywhere around the world that life insurance sales, mortgage broking or fire and general sales would be considered as a profession."