Competency, high standards of conduct, ethics and accountability are the hallmarks of a profession.
Based on that criteria, many advisers already pass the professional test yet they still can’t officially claim the title and associated privileges.
Admittedly, there are still some who do not possess the requisite criteria but a profession can’t be held back by lowest common denominator thinking.
Under FASEA, advisers must demonstrate competency, comply with standards and values set out in the Code of Conduct and, by 2026, all must hold a qualification equivalent to an approved degree. Many already do.
Advice is also entering a new era of accountability with changes to breach reporting coming into effect on 1 October 2021. Under this regime, AFSLs are obligated to report to ASIC serious compliance concerns about financial advisers, mortgage brokers and other AFSLs.
This will significantly increase the reporting obligations on licensees.
Yet, as discussed in a previous article, advisers do not yet enjoy professional privileges like the ability to form educated views and use their professional judgement when advising clients.
Under the Best Interest Duty (BID), they must consider a client’s personal situation, needs and goals. In addition to meeting BID, they must prove it too by investigating and documenting multiple strategies, stress testing them against multiple scenarios, and detailing the basis of their advice.
This expensive, time-consuming process is behind the rising cost of advice. BID also prohibits systems and tools that may help reduce costs, such as house views.
Isn’t it time advisers had access to the same benefits bestowed on other professions?