The Professional Advisers Association has submitted its recommendations to MBIE on the Options Paper.
We believe that achieving recognition of the specialist role provided by all
advisers is central to the success of our profession. To support this outcome, PAA submission recommendations to MBIE include:
- The PAA has recommended that all current designations – AFA, RFA and QFEA – be replaced with a single designation for all advisers.
- To clarify, the PAA has not recommended that all advisers become AFAs under the current structure. We are recommending a revised regime.
- The PAA has recommended that all advisers be subject to the Code, but under a revised structure in which the Code would provide for more flexibility for different types of advice.
- The PAA has recommended a broader role for the Code to again allow for greater flexibility in the practical application of regulation.
- The PAA has recommended that all advisers gain qualifications to a level that is currently referred to as Level 5. However, we have recommended that these should be advice-relevant and obtained using CPD over a three-to-five-year transition period.
A central theme underpins all of our recommendations – that is to improve consumer understanding of advisers and the reputation of advisers. To support these goals and a healthy future for advice, we believe that achieving crystal clear delineation between sales and advice is essential. To achieve this clear delineation, we need to have certain standards that apply to all advisers, as opposed to those performing a sales function.
We are very aware of the important balancing act between regulation that supports these aims, and creating an overly complicated compliance structure for advisers. The recommendations we have made would: (1) support the industry in developing a greater role for advisers in the lives of consumers, and (2) provide the necessary flexibility to be practical for advisers in the day-to-day.
Regulatory change is a complex process. Throughout our many meetings with MBIE we have sought to find a solution for advisers that both better supports their role in New Zealand, and which supports practical compliance. Our profession needs a regulatory structure that recognises and safeguards the value of advice – it is in the interests of every member and of consumers.