Renato Mota

Insignia has proposed advisers should be issued with a practising certificate by a centrally regulated body in its submission to the Quality of Advice Review.

The submission stated confidence and trust in advice would improve if consumers knew their adviser has been assessed as fit and proper by a regulated body.

“We recommend that advisers are issued with a practising certificate by a central regulated body that ensures all advisers are subject to the same requirements and assessed against the same level of standards.”

Insignia stated the AFSL regime would remain and the submission makes no reference to potential disruption from a move to individual licensing, which is a potential outcome of the ALRC review into the Corporations Act.

“The practicing certificate would ensure advisers are fit and proper, meet initial and ongoing training requirements, and have no unpaid AFCA determinations or serious compliance concerns. Advisers would be unable to be authorised or employed by an AFSL or registered with the single disciplinary body unless they had a practicing certificate.”

The submission pointed to the examples of solicitors in NSW who must hold an Australian practising certificate issued by the Law Society of New South Wales or accountants who are required to hold an Institute of Public Accountants Professional Practice Certificate.

Insignia stated consumer needs exist along a continuum and the regulatory system does not currently meet consumer needs.

“This leads to poor client experience and a lost opportunity for Australians to benefit from receiving financial advice to improve their financial wellbeing.”

Renewed commitment

Insignia’s submission was one of over 100 uploaded online by Treasury on Thursday afternoon along with financial services minister Stephen Jones stating his commitment to the review.

“As part of delivering on this commitment, I have met with Ms Michelle Levy, the independent reviewer conducting the Quality of Advice Review and support the Review continuing under its current Terms of Reference,” he said in a media release. “I look forward to receiving the Review’s final report and recommendations on 16 December 2022.”

Jones said the review provides an important opportunity to streamline and simplify the regulatory settings for financial advice to reduce cost and remove duplication.

“Alongside the Review, I remain committed to looking at reforms now to assist financial advisers in being able to meet the needs of their clients including the education requirements for experienced financial advisers.”

Earlier this month Jones announced he has directed Treasury to begin work on delivering the experience pathway “as soon as possible”.