The Australian Securities and Investments Commission’s (ASIC) announcement yesterday to significantly lift the training framework for financial advisers could mean the end of the current minimum standard Regulatory Guide 146 (RG146).
Consultation Paper 153 Licensing: Training and assessment framework for financial advisers (CP153) sets out to refresh industry standards by proposing that all new and existing advisers providing advice on Tier 1 products are to pass a competency certification exam.
In addition, all advisers will be required to take a knowledge update review every three years and meet ongoing continual professional development standards. New entrants will need to undertake a supervision period for at least one year full-time or equivalent.
As the shortcomings of RG146 in training and assessment requirements have been so palpable, CP153 could be a viable framework to end the variations in training standards and respond to the growing calls from industry associations, registered training organisations (RTOs) and financial planners themselves to set a new standard that actually matches the profession of financial planning.
In the December 2010 – January 2011 issue of Professional Planner, an ASIC spokesperson said that “informal discussions with industry stakeholders about the effectiveness of the training in RG146 are being conducted”.
At the time, no changes to the policy were being planned.
ASIC commissioner Greg Medcraft said in a press release that ASIC’s review “identified concerns about current training standards and highlighted that change in required to increase consumer confidence in the financial advice industry and to encourage professionalism”.
He said the proposal is “designed to improve the quality of advice by ensuring that all financial advisers achieve a uniform minimum standard that is consistent with developments in the industry both here and overseas”.
Feedback on CP153 has been requested by June 1, 2011.
This is probably a step in the right direction, and should have been done first, instead of the dog’s breakfast of politically driven Enquiries which created FoFA, Cooper, etc.
If ASIC, in a systemised, comprehensive, and knowledgeable manner (as we expect from a Regulator, instead of the clearly Posterior Protecting Panic Presently Promulgated) advocated a review of the FSRA, 10 years after legislation and 7 years after its start, I believe everyone would willingly and constructively have participated.
Instead, we have a corruptly political, agenda driven debauchery, blatantly not in the Industry or Australia’s interest as a whole being jammed down our throats, after the horse has bolted.
This will inevitably cost BILLIONS, take years to unwind (as the inconsistencies, anomalies, loopholes, costs, and unintended consequences appear), destroy thousands of small businesses built over decades, and disenfranchise millions of small investors from access to personal advice. The best existing example of ridiculous Treasury planning (and its consequences) was the since cancelled Super Surcharge.
Education is always good, but in an industry that is subject to so many variables, daily (or hourly) changes, and enormous information flows, it is far more important to have a framework, perspective, strategic purpose, and an ability to process/adapt than than to have certificates on the wall.
It’s about time.
The industry has resisted progress on this for too long, weighed down by the vested interests of ‘flag-of-convenience’ principals, antipathy and laziness. Such an attitude has spurred a ‘training’ industry supplying deficient, wildly overpriced courses that have a market only because the the $000’s they charge for a few days of mostly poorly constructed and poorly delivered material is seen as a fair trade-off by those who won’t invest the time and effort over a real amount of time to get a proper education and develop real experience. They survive on the myopia and stupidity of the regulator and the opportunism of both their purveyors and participants.
Of course it will be more difficult, confronting and challenging for everyone (myself included) and so it should be. Our clients deserve that.
This is another step in the right direction.
I wonder if the competency test will be multiple choice? : )