"What I really like about this is that it sets a clear expectation of growth and development"
The updated Financial Advice Code comes into force on Nov. 1, and while much of it tidies up technicalities, there are a few more significant shifts for mortgage advisers to get their heads around.
Under the new code, staying “current” isn’t enough. Advisers are expected to continually develop their skills, and potentially expand their learning into other areas of advice where the client’s situation is more complex.
It also requires a solid grasp on what their core competencies are, and what may need work.
Eugene Bartsaikin, director and mortgage adviser at Twine, thinks the changes are positive as they’ll prompt both advisers and FAPs to rethink how they approach professional development.
“I think this is really good for the industry. I do wish there was a bit more clarity on precise expectations, because it is still quite broad,” he said.
“The direction has changed from ‘you have to do something’ to ‘it’s your responsibility to actually understand what you’re good at, and what you’re not good at.’ You’re not completing a professional development plan just because you have to, but because you’re actually using it to grow.”
Bartsaikin said that Twine has been actively reviewing its CPD strategy and treating it as something ‘live’ for some time. However, he says the revised Code will be a good wake up call for the industry at large.
In particular, the new language around “continually developing” is trying to encourage a shift in mindset: maintaining competence isn’t enough anymore. Advisers are expected to actively identify gaps and close them.
“Across the industry, I know there’s a lot of complacency. What I really like about this is that it sets a clear expectation of growth and development,” Bartsaikin said.
“It’s a very important distinction, because ‘maintain’ means you’re just maintaining the status quo,” he said. “You’re neither trying to grow, nor are you trying to get worse. What continuous growth does is shift the language towards actually doing an assessment of where the weaknesses are. FAPs probably need to do more work with their existing advisers to see where the core competencies are, and what needs work.”
That also means responsibility doesn’t just sit with individual advisers. The code now explicitly raises the bar for FAPs too. They’ll be expected to take a more active role in developing their people, setting policies, and supporting ongoing learning – something Bartsaikin said could hit smaller providers harder.
“There’s a lot of benefit for medium or large FAPs. For smaller FAPs, it becomes harder to have good and clear policies in terms of what the actual FAP is doing.”
The revised code also recognises that learning doesn’t necessarily have to be “formal” to be valid. The new commentary around CPD explicitly includes informal development – the kind of learning that happens in mentoring sessions, networking groups, and even over coffee with a colleague.
Still, the lack of clearly defined expectations is still something of a sticking point. Without minimum expectations around CPD hours, there’s a risk some advisers won’t engage meaningfully at all.
“I would like to see a clear expectation – for example, advisers need to do at least this many hours a year of CPD,” Bartsaikin said. “It’s a bit vague at the moment, because you could be doing five hours or fifteen. Where does the FMA draw the boundary as far as what’s enough, and what isn’t? I know regulators aren’t trying to over-burden us with too many requirements, but sometimes if it’s not clear enough, it’s also confusing.”
Looking further ahead, Bartsaikin sees the changes as preparing advisers for a future where rigidly siloed advice roles are less common.
“This is somewhat future-proofing as well, because I think the adviser of the future isn’t just going to be focused on one thing,” he said. “All of these fields will begin to blend, and advisers will be expected to do a lot more for individual clients. I think this is where the ‘continually develop’ expectation is setting the right tone.”
