The Press FRIDAY, FEBRUARY 14, 1964. Examinations For Sharebrokers

Press, Volume CIII, Issue 30365, 14 February 1964, Page 10

The Press FRIDAY, FEBRUARY 14, 1964. Examinations For Sharebrokers

The report that London stockbrokers will, in future, have to show by examination that they are qualified to give investment advice has caused a flutter in the City dovecote. The institution of an examination will be seen as the beginning of the end of the old system of admission by wealth and family connexions. Under this system virtually anyone with several thousand pounds for his “ nomination ”, sureties, and entrance fees, and the right connexions, could become a member of the Stock Exchange. It has survived partly because an alternative method of entry to the exchange enables experienced clerks in broking houses to become members for much more modest amounts. The typical family firm has thus been able to recruit able young men and train them for senior positions, or even partnerships, in the firm. Like many English institutions, the London Stock Exchange has met its critics with the simple reply: “It works”. This defence is becoming increasingly inadequate in a society which is now suspicious of privilege. The London Stock Exchange has acted boldly to preserve the reputation of its members for probity and acumen, although its decision will no doubt be construed differently by its more conservative members. Eventually, members of the public seeking

investment advice from a London stockbroker will be assured not only that their broker seems to know what he is talking about but that be has satisfied an examiner of his competence. The question is bound to be asked whether New Zealand sharebrokers should not also be required to qualify by examination. The question was, in fact, asked by our commercial editor several years ago; the sharebrokers dismissed it with the reply that London stockbrokers did not have to pass examinations. There is an even stronger case for the institution of a sharebroker’s examination in New Zealand, where membership of a stock exchange is much easier to acquire than in London. Many sharebrokers are qualified accountants; but the accountancy course is not designed for sharebrokers. It is scarcely surprising that so many public accountants who are members of a stock exchange wish to retain their accountancy practices. Although the “ public accountant- “ sharebroker ” is diminishing in numbers, he will probably not disappear entirely until the Stock Exchange establishes its own examinations and improves the professional standing of sharebroking. The Stock Exchange has recently shown itself alive to this need, it should plan now to follow the lead of the London Stock Exchange.