First impressions of an educator: It is time for us all to step up and embrace our industry-created qualification

It is always interesting stepping into a new industry and getting a handle on the driving issues being faced by its members. I recently joined Strategi Institute as Academic Manager having previously worked for IRHACE, the body that represents people in the heating, ventilation and refrigeration (HVAC&R) industry. However, I can already see some surprising similarities.

Financial services and HVAC&R are industries that have been relatively unregulated in the past, but now face the prospect of greater controls. Both are operating in a world of increasing complexity and risk. Both industries have many people who are self-taught and who do not have formal qualifications. Both sectors also have an aging workforce, and neither industry is seen as a particularly glamorous destination for young people looking for a rewarding career.

HVAC&R faced its biggest crisis with the cool store fire in Tamahere in 2008. A fireman was killed, seven of his team were badly injured, and there was a massive loss of stock. The Coroner’s report at the time drew attention to the lack of formal training in the industry and there was a move to introduce licensing along the lines of that for plumbers or electricians. In the end, no new regulations emerged from that incident, much to the disappointment of many who were wanting a more professional approach. That industry now faces a second impending crisis with the introduction of new refrigerants with lower global warming potential. Many of these new refrigerants just happen to be flammable, and there are still people in the industry servicing equipment who have had no formal training. The forward thinkers have been actively working with government agencies to get people and the regulatory environment prepared for the technology changes being faced.

The financial services industry has had its own, in some cases highly visible, challenges. Almost everyone needs insurance, mortgage advice or superannuation. The Global Financial Crisis put some of the industry in a bad light and many people have seen their retirement savings diminished by poor investments. People’s lives are affected by the quality of the products they sign up to, and sometimes the consequences can be life changing. Owning the home you live in, or making the right decision about retirement savings, has a major impact on financial security.

The challenge for financial advisers is that they are helping people to make profound decisions that will have a big impact on their future financial security. Many ordinary people are overwhelmed by the complexity of products that are now available, or may be wary, having had bad experiences with earlier investments. The industry needs to find ways not only to overcome this wariness, but to ensure people are getting advice that will genuinely meet their needs.

Which brings us to the issue of professionalism. How can the financial services industry show it is responding to social and economic changes and raising professional standards? This means proving to your clients that you can be trusted, have genuinely good intentions, and will put their interests first. More than that, you are having to convince an increasingly sophisticated audience, who have easy access to online information and online products. Traditional sales patter will not work with younger and more agile minds. And how do you protect yourself from any backlash if things go wrong?

I have been very surprised to find out that many people are still reluctant to get credentialed in the financial services sector. This is in spite of the level 5 New Zealand Certificate in Financial Services being highly flexible both in what it covers, and how it can be achieved. Having been involved in the development of other industry qualifications over the years I can safely say that those who worked on the level 5 qualification did a good job. Some good quality advice was sought from the industry about content and requirements, and The Skills Organisation was able to steer it successfully through the constraints of NZQA quality assurance requirements.

A qualification can be very useful evidence of competency, as well as a way of demonstrating professionalism. However to retain credibility it needs to be well moderated and have mechanisms that ensure marking is consistent across providers and assessors. Failure to have good consistency arrangements will damage a qualification’s reputation and that is disheartening for those who have gone to the effort to get it. A qualification also needs to be part of a higher qualification pathway, making the current development work being done on a degree level course an important part of the big picture.

Merely having the qualification is not the end of the story either. Regulations change, as do products and the social and economic environment we live in. This means there has to be ways of continuing with professional development throughout a career and having evidence of that ongoing activity. Showing commitment to short courses and learning events that give access to the newest developments through continuous professional development (CPD) is a useful way of doing this. CPD schemes allow you to track your activity, and you have an evidence trail of good intent. Other professions successfully run these schemes and they have been seen as a mechanism for ensuring currency of knowledge.

Just as the refrigeration industry is now having to deal with new technology with greater potential risk to end users and tradespeople, the financial services sector is facing a period of reform and development to allay some of the fears that exist out there among clients and potential clients, as well as meet the expectations of regulators. A more rigorous regulatory environment brings challenges and opportunities. The ideal outcome is to generate a cultural shift within the industry where being well qualified is seen as the norm and continuous professional development is seen as a natural part of running a successful business and building a career.

Most of the reasons for not getting qualified do not really stack up when you look at them closely. Some have questioned the relevance of the qualification, but the New Zealand Certificate in Financial Services was designed by people from the New Zealand financial services industry. It has benefited from being a refinement of an earlier qualification, and one of its strengths is its flexibility. The stranded structure means people can focus on their specialty area to start with, and do additional strands if their role or business changes. For those of us who are a bit long in the tooth, the prospect of having to study again can be a barrier. The level 5 structure, however, offers the option of having a bit of a nibble to see how you get on, and doing more as your confidence grows.

Another reason sometimes given for putting off doing the qualification is pressure of work. The qualification has been designed to enable a number of different routes to completion. Strategi Institute, for example, offers different options ranging from short face-to-face classes that benefit from collegial input and trainers who can respond directly to questions on the day, to online or distance learning, enabling people to get access to their course without having to travel away from home. For people with business or family commitments there is not the prospect of a lengthy commitment to night classes. Because the qualification is highly focused, there is no “padding” to make the course last longer. The New Zealand Certificate is designed to be completed within half a year and it actually works well for people who are busy.

Others have indicated that they are waiting to see what the latest regulatory changes will require, however the qualification was written with the future of the industry in mind. It goes right to the core of what is needed with its focus on client needs, being knowledgeable about products, and fiduciary responsibility. The outcomes have been written in a way that allow content to be adapted and enhanced as regulations and requirements change. The danger of waiting until the qualification becomes a required part of being a financial adviser or financial advice representative is that there will inevitably be a rush to complete when things change, and available places may be limited just when you need them most.

I have also heard that people question the cost of the training, but a quick look at what other sectors pay for similar courses should reassure people that the Level 5 Certificate is good value for money. The teaching model that limits face-to-face classroom contact and relies on blended learning is highly cost effective. Institutions are not carrying the burden of large campuses and many full time staff, and they are able to be agile and responsive. At the same time they are participating in all the quality assurance processes required of being a good education provider.

So where does that leave me after a few brief weeks working in the industry? As a potential consumer I feel reassured that there is good work being done to increase the professionalism of the industry, so the ordinary person will get more reliable financial advice, better products that meet expectations, and that their interests will be put first. As an educator I am encouraged to see that the qualification is fit for purpose and can be achieved in a variety of ways. Even as a parent I see an industry where young people might find a worthwhile career that gives them self-respect and job satisfaction. Finally, as a critic, I see an industry that still has some work to do to get its house in order, but is moving tentatively along the right track.

Matt Allfree is the Academic Manager at Strategi Institute. He is a specialist in developing innovative training solutions that are practical, cost effective and compliant with NZQA requirements.