With the Quality of Advice Review set to retain general advice, The Advisers Association has suggested a higher standard of education is needed for non-relevant providers.
Advice review lead Michelle Levy proposed the ‘good advice’ regime which included the opportunity of larger institution like superannuation funds to give more advice but has tried to assure the industry the framework of the regime would keep out any conflicts of interest.
TAA chief executive Neil Macdonald said the currently required RG 146 level of accreditation needed for general advice should be upgraded to an AQF7 or AQF8 level of assessed topics (bachelor’s degree or graduate diploma, respectively).
“RG146 was an accreditation for its time,” Macdonald said in a media release.
“Following [the advice review], we will move into a new era for financial advice, an era of growing consumer needs and greater consumer expectations.”
Macdonald said the review proposals indicated individual non-relevant providers will be left to decide what training and education is required to give ‘good advice’.
“We think this would likely result in inconsistent outcomes for consumers, as people won’t know what they don’t know,” Macdonald said.
“We therefore think providers across the industry could agree on a common requirement, such as an upgraded RG146, for people giving ‘general advice’, and for the staff of ‘non-relevant providers’ providing ‘good advice’. This would result in minimum consistent standards being applied across the industry, which should have the flow-on effect of improving consumer confidence.”
He added this would result minimum consistent standards being applied across the industry which would improve consumer confidence.
Bad memories
The association also suggested the RG146 accreditation be renumbered to avoid previous negative connotations.
“Only a few years ago, some product providers were saying that RG146 qualifications were inadequate, and less onerous than those required to be a hairdresser,” Macdonald said. “They now have the opportunity to call for change.”
However, Mcdonald noted “a degree of caution” because the higher education standard may create the impression consumers may believe they are receiving personal financial advice instead of product advice and general information.
A common standard would also establish a better understanding of the requirements for providing advice; and recognised qualifications.
“Additionally, it has the benefit of creating a wider pool of people who can, if they want to, progress their studies to become fully qualified financial advisers,” Mcdonald said.
TAA also suggested it could be a good way to bring new advisers into a practice and supervise them while they learn on the job, similar to the ‘associate doctor’ program being run in NSW Hospitals to help alleviate the current shortage of doctors in the health system.
