AFAs must have the competence, knowledge and skills to provide financial adviser service, as outlined in the Code of Professional Conduct. In summary, if you are an AFA you should:
Identify for yourself the areas you need to focus on to improve your own competence, knowledge and skills in relation to your particular financial adviser services.
Ensure the training you do is structured professional development which maintains your competence at a level appropriate for the financial adviser services you provide or intend to provide.
Ensure the training helps you keep up to date with developments relevant to your particular practice.
Complete no less than 30 hours of structured professional development over the course of every two CPD periods.
In making these assessments, you should bear in mind:
A variety of subjects may qualify as CPD - provided always that the training is relevant to your needs.
The degree of difficulty that is acceptable can also vary, providing you are completing training relevant to your particular needs.
Your professional development
An AFA must maintain and keep current a professional development plan for each CPD period.
What counts as CPD
In most cases, an AFA's first CPD period will start on 1 January in the year following the AFA's date of authorisation (see Schedule H of the Code). There is currently no pro-rating of CPD periods.
In line with the intent and spirit of the Code, you should not delay training identified as necessary or desirable if your CPD period has not yet begun.
To satisfy Code Standard 18, AFAs must complete no less than 30 hours of structured professional development over the course of every two CPD periods. (Note that the term 'credits' is not used in the Code). You can interpret an hour of training usually to equate to an hour of CPD.
You should not include periods where no active learning is taking place e.g. lunch breaks at seminars would not count as part of your CPD hours.
Complete at least 30 hours CPD
It is important to note that 30 hours of structured professional development is a minimum requirement, irrespective of the range of financial adviser services provided. As a general guideline, the greater the range of services, the greater the likelihood that 30 hours will be insufficient for AFAs to continue to satisfy Code Standard 14.
Ensure your professional development plan (PDP) is personalised to you. Think carefully about the full range of skills you need to have to be a successful AFA. For example, think about what technical skills you want to improve on or gain as well as key business and client management skills.
2. Think strategically and ask yourself these questions
What was your experience like with clients last year?
What do you think you could have done better?
Were there any areas you didn’t feel confident advising on that you would like to include in your practice?
What learning opportunities are available that will add value to your clients?
What will make you a better AFA and help ensure you continue to be one?
3. Review your PDP regularly
Review your plan on a regular basis, eg, quarterly. When you start, your plan is likely to be idealistic, so it’s a good idea to reflect on how you’re tracking and any new training opportunities you’ve identified. This helps your plan becomes a living and breathing document.
4. Keep it simple but relevant
A PDP only needs to be a few pages. Include your reasons for wanting to undertake selected training but take care that it’s not so granular that there’s no room for flexibility. We expect it to be a thoughtful and insightful document and cover the matters required in Code Standard 17.
5. Identify any gaps in your competence, knowledge, and skills
When we monitor AFAs, we focus on whether you have noted in your PDP any competency gaps or areas for improvement and what steps you are taking to address these. Code Standard 17(d) requires an AFA’s PDP to take into account the “minimum level of competence, knowledge, and skills an AFA is required to be able to demonstrate to provide that service under Code Standard 16” – with a view to identifying any areas for improvement or gaps in competence, knowledge, and skills when compared with that level. This may particularly apply if you’re relying on an old competency pathway that’s no longer available for new authorisations.
6. If you’re relying on an old competency pathway that is no longer available
If you think you need to up-skill or strengthen your competency in certain areas as a result of differences between an old competency pathway and a Component of the New Zealand Certificate in Financial Services (Level 5), take the following steps:
Write in your PDP if you are relying on an old competency pathway that is no longer available.
Identify and write in your PDP any learnings that you think you need to address to bring your competency up to the minimum level under Code Standard 16. To do this, simply compare the learning outcomes for each of the relevant Unit Standards of the Components of the New Zealand Certificate in Financial Services (Level 5) with your current competency, knowledge and skills. For any identified new learning outcomes or areas for improvement, use your professional judgement to determine how best to achieve this. For example, complete a bridging course offered by an educational provider, complete the relevant unit standards, or undertake some other form of structured professional development.
Write in your PDP the reasons why you believe you have the competence, knowledge and skills required to provide the services that you intend to provide (notwithstanding any areas for improvement or gaps you have identified). See Code Standard 14.
7. Don’t offer services you don’t have the capability to provide
You must have the competence, knowledge and skills to provide any particular services that you offer. Therefore think honestly about whether you have the necessary capability to provide them. If not, then don’t offer that service, and tell your clients you are unable to provide that service. Make sure your scope of service documentation is consistent with this.
What is structured professional development
The Code defines structured professional development as "training that has identifiable aims and with outcomes relevant to the learning needs identified in the AFA's professional development plan, and:
a) is provided by a qualified educator or relevant subject matter expert; and
b) provides for interaction and feedback; and
c) participation is verifiable by documentation"
Structured professional development may include technical product training but excludes training provided for the principal purpose of promoting a particular financial product.
The Code requires AFAs to undertake such additional training as necessary to:
Maintain competence at the appropriate level for the financial adviser services the AFA provides or intends to provide
Or to satisfy the AFA's professional development plan for that CPD period – whether in the form of structured professional development or some other form.
AFAs will need to be able to demonstrate they are satisfying their professional development plan, so it’s important to record all relevant professional development activities undertaken, whether in the form of structured professional development" or some other form.
Include professional development in your Adviser Business Statements (ABS)
As part of your ABS, it should be clear how you are meeting the Code requirements relating to competence, knowledge and skills including continuing professional development.