Why you should start your level 5 qualification early
Human nature has many of us leaving things to the last minute as we feel we can work better under pressure and tight deadlines. However doing this when undertaking your New Zealand Certificate in Financial Services Level 5 could cost you dearly.
Strategi Institute recommends all financial advisers commence their level 5 qualification in 2017. Reasons for this are:
- Level 5 is a big piece of work: Obtaining the New Zealand Certificate in Financial Services Level 5 requires students to complete the Core Strand and at least one specialty strand so as to obtain a minimum of 60 NZQA credits. This is a big body of work and would logically take six months for someone who is also working full time and does not want the study to impact upon their revenue generating ability.
- Financial advisers will have more study in 2018: It is also likely that those who will be actively involved in providing financial advice will need to complete the Financial Advice Strand which is a further 30 NZQA credits. Strategi recommends you hold off doing the Financial Advice Strand until mid-2018 when the Code Working Group will be getting close to finalising their recommendations. Content for the Financial Advice Strand will likely change to reflect the new financial adviser code and legislation/regulation so waiting is prudent.
- Transitioning to the new regime will impact upon your revenue generation: Mid-2018 onwards will be a very busy time for financial advisers as they digest the new legislation, regulation and code and prepare to move into FMCA. In many firms, new compliance processes and templates will need to be adopted plus financial advisers will need to identify what Financial Advice Provider they wish to operate under. Advisers will be busy with these changes plus continuing to make a living and if they are only starting their Core and speciality strands at that point- then it is likely revenue generation will suffer.
- You need to make yourself attractive to FAPs: From about August 2018, those firms who are applying for a transitional financial advice provider (FAP) licence will be assessing who they are prepared to accept under their licence. Logically, they will only want to take on board qualified and low risk advisers who are high revenue earners and have already demonstrated a willingness to upskill and become compliant. No potential licence holder would want to recruit those who are slow adopters and will fight the changes. These sorts of people are too big a compliance risk and will take too much time in the transition process. Therefore, it is essential financial advisers make themselves attractive to potential FAPs by already having their New Zealand Certificate in Financial Services Level 5 completed by about August 2018.
- Potentially declining revenues and increasing costs: Consumerism and regulation are driving greater transparency of fees. It is likely clients will demand greater value for money plus some commission structures may decrease or even disappear altogether. Combine this with financial advisory firms merging to gain greater market penetration and brand recognition, and it becomes likely that the current good days of high margins may come under threat. Additionally, the cost of doing business will rise with the inevitable rise in compliance costs as you move into the more regulated FMCA regime. Therefore, it is prudent to incur your expenditure in your level 5 qualification now whilst you are not burdened with one off transition costs and higher operating costs with a potential lower gross revenue. The good news is Strategi Institute is highly competitive with its level 5 course pricing.