Nigel Tate, president of the Institute of Financial Advisers, says the push for official recognition of professional bodies is likely to be one of the focuses of the financial sector this year.

“There’ll be an ongoing discussion about recognition of professional bodies.  It’s a key element for the government to consider,” he says.

“There are too many practitioners who are not members of any industry body.”

The minimum standards for authorised financial advisers are enforced by the Financial Markets Authority, a government regulator. 

Tate says a number of New Zealand’s peers have allowed professional bodies to regulate advisers’ professional conduct.

“Professional bodies are already recognised in Australia, the UK and the United States as well.  If we are looking to close that regulatory gap that’s an area to be looked at.

“Most professional bodies have already been doing the fundamental stuff right.  Now it’s about the government recognising that as they’ve done with QFEs, which have a focus on systems and processes.  I would like to see something done in that area.”

Tate says recognising professional body would be an important step towards financial planning becoming a profession.

“At the moment we have regulatory standards.  We need professional standards set by the profession.  They have that for lawyers, doctors and accountants.”

And he says there doesn’t need to be only one professional body in the industry, provided there was one consistent industry standard to uphold.

“If there are 10 professional bodies that meet a standard, there’s no reason they can’t have 10 as long as they remain viable.”