Minimum standards of competence
All AFAs must abide by the Code of Professional Conduct. The Code requires a financial adviser to acquire the competence, knowledge and skills to provide the relevant service. AFA applicants must show that they meet the required levels of competence when they apply.
The New Zealand Certificate in Financial Services (Level 5) (NZ Certificate) is prescribed in the Code as the minimum competence standard AFAs must meet for the financial adviser service they are providing. The NZ Certificate provides qualifications in the following components:
Core component
Covers professional practice, ethics, risk and compliance of the financial services industry, legislation and regulations, understanding the research and analysis processes, and understanding the economic environment and its interdependencies with financial markets.
Financial advice strand
Covers the application of the financial advice process and the fiduciary responsibilities, legislation and regulations relevant to professional client service and financial advice.
Investment strand
Covers investment concepts, legislation and regulations relevant to investment services, the relationship between investment products/services with individuals’ needs, and the principles of investment analysis to ensure appropriate solutions to investment needs.
Specialist strands:
- life and health insurance
- general insurance
- residential property lending
- personal lending
- banking
- trustee services.
These components are registered with the New Zealand Qualifications Authority (NZQA) on the National Qualifications Framework providing a nationally recognised and measurable standard across the financial adviser sector.
See The Skills Organisation’s website.
Proof of competence
We will check that advisers applying for authorisation meet the required competence requirements that are relevant to the financial adviser services they wish to provide.
Those who want to be AFAs must provide evidence that they:
- have attained the core component and at least one other strand relevant to the financial adviser services they want to provide, contained in the New Zealand Certificate in Financial Services (Financial Advice) (Level 5)
- or hold an alternative qualification or industry designation listed in the Code as being an acceptable alternative to a particular component strand; these are listed in the Competence Alternatives Schedule in the Code.
Advisers need to upload copies of qualification documents when they apply for authorisation online at the Financial Service Providers Register.
For more information see the Code of Professional Conduct for Authorised Financial Advisers and the AFA Authorisation Guide.
Training and competence assessment
The Skills Organisation, the national standards setting body for the financial services industry, makes sure there is sufficient, appropriate training available and manages the competence assessment process for the authorisation of financial advisers. See the Skills Organisation website for information about training and assessment.
For other information about alternative qualifications, designations and lapsed designations and application requirements read the AFA Authorisation Guide.
What do I do if my qualifications were attained overseas?
The Code does not include any foreign qualifications in the list of alternative qualifications or designations. If your qualification or designation is not currently recognised in New Zealand then you should apply to The Skills Organisation to be assessed and examined against individual components (within the NZ Certificate).
You can do this without undertaking any additional training; however, it would be wise to first check with The Skills Organisation whether assessment only options are appropriate for you.
Are there any exemptions?
FMA has limited powers to exempt any person, class of person or activities from complying with any section of the Financial Advisers Act, associated regulations or the Code. FMA will limit the use of its powers to cases that meet prescribed statutory criteria, and all exemptions will be based soundly on the policy of the law.
Who is the Code Committee?
The Code Committee was appointed in July 2009 and developed the Code of Professional Conduct for Authorised Financial Advisers.
