A stakeholder survey by New Zealand’s Financial Markets Authority (FMA) has produced contrasting views on the quality of financial advice.

Some respondents note improvements in overall quality and professionalism but most say they have seen no change, the regulator says.

“Stakeholders suggested… the biggest differences have been made in terms of adviser compliance, but compliance does not mean the quality of advice has improved.

“A number of stakeholders suggested some of the bad players had been ‘weeded out’ through the licensing process, but that many still remain.”

There are also “wide concerns the qualification requirements for authorised financial advisers (AFAs) is not strong enough”, the FMA says. This fear is “driven by a perception that there are many insufficiently qualified advisers operating”.

It says the concern “was echoed more strongly for registered financial advisers (RFAs), with some stakeholders suggesting the RFA regime was meaningless given the low entry requirements”.

Despite being limited to Category 2 products, RFAs have great influence on personal financial advice and handle significant transactions without the right qualifications, some stakeholders claim.

“There was also some concern the public interpreted the AFA and RFA designations as representing qualifications, quality and capability.”

The survey shows the public is more aware of designations such as AFA and RFA than quality and competence-based qualifications such as certified financial planner.

Some stakeholders want more consumer education on the certified financial planner designation.