Strategi Group executive director David Greenslade says it is seeing too many people enrolling for L5 under the impression all they need is complete the training and then go back to operating any way they want to.

“The reality is very different, and students and employers need to review sections 431I-431P of the Financial Markets Conduct Act 2013 to understand the unique role the qualification plays in setting the benchmark to which all financial advice providers must operate,” he says.

The qualification is about the practical implementation of regulated financial advice, rather than just theoretical learning, Greenslade says.

The Level 5 qualification sets the benchmark for:

• the level of knowledge a person needs to hold to provide regulated financial advice;
• the framework for the provision of that advice;
• what is deemed to be a professional industry standard for the provision of regulated financial advice.

All those giving regulated financial advice to retail clients are required under the Financial Markets Conduct Act, to meet the standards of competence, knowledge, and skill (including CPD) provided for in the Code of Professional Conduct for Financial Advice Services. Currently, the standard set in that code is the New Zealand Certificate in Financial Services (Level 5) V2 – or its equivalent.

The current two year ‘safe harbour’ transition period for achieving this level of competency expires in March 2023, so advisers need to make sure they have a plan in place for getting their competency levels up to this standard before then. Just doing what they’ve always done – even if they have completed L5, might not cut it.

It is also important to note that the safe harbour only applies to competency – FAPs still need to ensure all those providing regulated financial advice are compliant with the relevant legislation, regulation, code and conduct obligations now. The duties outlined in sections 431I-P still need to be met.

Building the equivalent of the New Zealand Certificate in Financial Services (Level 5) V2 is something Strategi Institute is doing for a number of corporate clients – normally product providers. This is a cost effective way to build competency amongst a large number of advisers where the business has well established systems and the product range is narrow. The Level 5-equivalent training we build is specific to the role rather than the individual.

If you think building a Level 5-equivalent option could be for you, contact us for details