Table summarising major submission points raised on the second draft of the Code and the Committee's responses to those issues
| Issue raised |
Response |
| Competence Alternatives Schedule contd. |
| Unit Standard Set D |
Should CFPs be granted relief under Standard Set D, where they have experience and a good performance record, but have not completed any of the alternative qualifications currently listed, given that CFP is an internationally recognised designation overseen by the International Financial Planning Standards Board?
Submitters are concerned that some CFPs may simply retire if they are required to complete further studies to prove competence.
|
Standard Set D is an academic skill set. The only basis for granting relief against Standard Set D is accordingly a specified qualification, with a designation on its own being inadequate to demonstrate a sufficient level of knowledge in this regard. The only designation that the Committee considered provided an adequate assurance as to academic competence was the CFA Charterholder designation. |
| Should those who have obtained CFP status overseas be granted relief under Standard Set D? |
The Committee saw no basis for granting relief against Standard Set D for those who have attained CFP status overseas. |
| Should those who have completed the Certificate in Financial Services from Adviserlink Learning Limited receive relief in relation to Standard Set D? |
The Committee considered that the Adviserlink Certificate was not set at a sufficiently high level to warrant relief against Standard Set D. |
| Is there to be any relief for advisers part way through recognised alternative qualifications or designations? |
See earlier response in relation to this issue. |
| Should those who are members of the Fellow of New Zealand Society of Actuaries (FNZSA) be granted relief from Standard Set D? |
The Committee was not satisfied that there was anything inherent in the requirements to attain FNZSA status to provide confidence that every holder of that designation would have gone through a process that was appropriate to warrant recognition against this Standard Set. |
| Should FINSIA and/or Kaplan qualifications be recognised for relief under Standard Set D? |
See earlier response in relation to recognition of foreign qualifications. |
| Should AFPs, who have completed four papers from Graduate Diploma in Business Studies (Personal Financial Planning) (Massey University), be exempt from Standard Set D to ensure consistency with Standard Set E? |
Given the distinction made in the Act between category 1 products and category 2 products, the Committee did not consider that consistency of recognition against Standard Set D with recognition against Standard Set E was necessary. Insistence on the full Diploma was considered appropriate in the context of Standard Set D. |
| Should relief for NZX Advisors under Standard Set D be increased beyond those who hold the NZX Diploma to all those with NZX Advisor status? |
Standard Set D is an academic skill set. The only basis for granting relief against Standard Set D is accordingly a specified qualification, with a designation on its own being inadequate to demonstrate a sufficient level of knowledge in this regard. The only designation that the Committee considered provided an adequate assurance as to academic competence was the CFA Charterholder designation. |
| Unit Standard Set E |
| Should the qualification of New Zealand Diploma in Life Assurance be deleted as an alternative designation from Standard Set E, in light of the fact that it is just one of three qualifications accepted towards becoming a CLU and those other two qualifications are not included (and CLUs, without restriction, be granted relief from Standard Set E)? Submitters noted that this particular qualification to be the 'easiest'/'weakest' of the three qualifications accepted towards becoming a CLU, and there are no CLUs who do not possess one of the 3 qualification options. |
Recognition of various qualifications held by those with a CLU designation has been included in the updated list of alternative designations in the Competence Alternative Schedule. |
| Should those who have obtained CFP status overseas and have received a certificate from NZQA confirming the overseas qualification is equivalent to at least the Level 5 Certificate, be granted relief under Standard Set E? |
Unless the confirmation provided was at a sufficient level to provide a cross credit recognition (so that the individual was, in effect, awarded Standard Set E) the Committee considered that it would be inappropriate for the Code to provide such recognition. |
| Should those who have completed the Certificate in Financial Services from Adviserlink Learning Limited receive relief in relation to Standard Set E? |
No. The Committee considered that the Adviserlink certificate was not set at a sufficiently high level to warrant relief against Standard Set E. |
| Should the Waikato Diploma in Financial Planning and/or the Waikato Graduate Diploma in Financial Planning receive relief in relation to Standard Set E, due to the fact both contain a paper on risk? |
Advice received by the Committee indicated that it would be inappropriate to recognise the Waikato diploma against Standard Set E. |
| Should the alternative qualifications and designations in Standard Set E be reduced to avoid the Code being potentially opened up to all local advisers in the insurance sector? Concern was expressed that the NZ Diploma in Life Assurance was insufficiently robust to warrant comparability with Unit Standard Set E. |
The Committee has endeavoured to address this concern by linking the qualification in question to the CLU designation. In the context, the Committee was satisfied that the combination of the CLU designation together with the academic qualifications identified were sufficient to warrant relief against Standard Set E. |
| Definitions Schedule |
| Should definitions adopted from the Financial Advisers Act 2008 and Financial Service Providers (Registration and Dispute Resolution) Act 2008 be referenced to avoid confusion? |
The definitions included in the Code have been reviewed for consistency against the Act. The Committee considered that it would be unhelpful to effectively require anyone wishing to review the Code to have a copy of the Act on hand. The only exception to this is in relation to the definition of wholesale client, where the Committee felt that it would be disproportionate to repeat the Act's complex definition of that term in the body of the Code. |
| Should the definition of 'professional body' be expanded to include compliance by members with professional standards and enforcement of those standards through a disciplinary process? |
For the purposes of Code Standard 18, the only requirement the Committee considered to be of relevance was insistence by the relevant body that its members comply with a specified CPD programme. The Committee considered the approach taken was appropriate. |
| Should the definition of 'professional body' exclude the requirement for 'continuing professional development or training requirements specified by the organisation', in light of the fact that certain alternative designations recognised in the competence alternatives schedule do not require compliance with any CPD requirement? |
The point of identifying professional bodies in the Code was to ensure that there would be a wide range of bodies available to provide continuing professional training. This is different to the alternative designations recognised in the Competence Alternative Schedule, which have been included for a different purpose. |
| Should the definition of 'complaint' include a requirement for the complaint to be made in writing? |
The Committee considered that insisting on complaints being made in writing risked creating reluctance amongst clients to complain. The Committee considered that there should be as few impediments as possible put in the way of a client's legitimate concerns being treated as a complaint. |
| Should the definition of 'complaint' include a materiality test? |
The definition of complaint has been adjusted so as to exclude complaints that are trivial or vexatious, as well as including a mechanism for AFAs to seek clarification as to whether or not the client is actually wanting to make a formal complaint when an expression of dissatisfaction is received. |
| Can 'land investment product', in relation to a category 1 product, be further defined in terms of what it encompasses? For example, would it cover individuals advising on farm sales? |
The Committee is unable to provide a definition of land investment product. This term is to be prescribed by regulation. As at the time of finalising the draft Code for recommending to the Commissioner, no indication had been given to the likely scope of the concept. |
| Can 'class service' be further explained as to whether the advice provided as part of a class service is considered advice of an entity or advice of the individual adviser who is part of that entity? |
This query is a matter of legislative interpretation. It is beyond the powers of the Committee to address that concern in the Code itself. |
| The definition of 'personalised service' needs to be updated to reflect the latest changes to the Act. |
The definition has been updated to reflect the final wording in the Act. |
