With the impending new regulations, the focus within the Adviser industry is heavily on education. Will a certain qualification be required? What will the ongoing professional development requirements look like?
While many of the questions remain unanswered at this point, one thing is certain. There will be a heavier focus on ensuring Advisers in the industry have the correct knowledge to serve their clients in the right way.
Here at Newpark, we have been considering what the expected education requirements might mean for the industry. Currently, Leigh Austin, our Best Practice and Licensing Manager is undertaking the Level 5 qualification that is expected to be the regulatory requirement.
She has found the process a fascinating one and in this article she shares her thoughts on the qualification itself, what is involved, the importance of education and what it means for the Adviser community.
The Level 5 Qualification
This qualification has been structured into modules so that you can pick the areas that you want to specialise in. The Core module is a mandatory component, but you can then pick a strand depending on your interests - mortgage, risk, life and health, investment, or financial services.
The only module that is mandatory is the Core one. This is the module that Leigh found the most interesting. The main component is the comprehensive 6 Step Process for how to give effective advice. The focus is on the client’s needs and putting them first. Within the regulatory environment, it explains what you need to be aware of and what is considered good advice from a customer’s perspective.
The module also gives a general background on everything an Adviser needs to know to operate within the financial industry. It helps you to understand how the whole regulatory field works, how it impacts the advice you give and the obligations you have. The Core module is packed full of necessary skills and if you don’t complete it, you won’t get your certificate at the end!
Leigh is currently undertaking the Life and Health module which she has found to be more specific to the available products and the insurance options for the client.
The question on many Adviser’s lips is, ‘how long is it going to take me to complete’? Instead of thinking about the time you will spend, focus on the benefits for you in the long term.
It is pretty much a given that there will be some form of qualification needed in the new regulations. Don’t think about it is a drag and a time waster, but think of how you can further your career and extend your knowledge with the opportunity. While there is a definite commitment required to attend and engage in the workshops and complete the assignments, the deadlines given are pretty generous.
Leigh’s top tip is to stay on top of your workload as you progress through the material. Don’t leave everything to the last minute. Get onto it as soon as possible so that you don’t lose momentum. Otherwise, a backlog could mean that you move the course content into the too hard basket and won’t be able to complete it.
The Importance of Education
Newpark believes that education is really important for Advisers.
The main reasons are that it brings credibility and professionalism to the field. There has been a lot of criticism of the ‘insurance’ industry in the past. The perception has been that it is all about Advisers making sales. People have felt bullied or pushed into buying cover they don’t need.
Newpark want to reverse this perception. Our view is that clients should only receive the advice and products that are best for them.
By being qualified, clients are assured that their Adviser knows what they are talking about and that their recommendations are on point. It builds confidence in the industry from a client perspective.
But it can also build your own confidence as an Adviser. You may not have all the answers yet, but the qualification process will help you obtain them. It also arms you with a process to protect yourself. Should you be under scrutiny from the FMA, you can bring confidence to your business that you have a set process to follow if that happens.
How It Will Impact The Industry
As we have indicated several times, Newpark believes it is quite clear there is going to be an education component required in the new regulations.
We feel that it will rest at a Level 5 qualification or its equivalent.
We also feel that there will be an ongoing requirement for personal development. The new regulations will demand that you have to demonstrate your ongoing competency in the field. So, the qualification will only be step one. Step two will be the continued requirement to show you have the care diligence and skill to give client focused advice.
This can only be a positive thing. Ongoing professional development will continue to keep you stay at the top of your field. You can have the confidence that you are providing your clients with the best advice and the best solutions for their needs.
The best part? Newpark will be supporting you the whole way. So if you are interested in joining an Adviser network full of like minded professional Advisers in an environment that supports growth and development, get in touch with Newpark today.