Australia leading the world in CFP standards
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The Australian financial planning industry is leading the world in education standards, according to Financial Planning Standards Board (FPSB) chief executive Noel Maye.
The FPSB is a non-profit association that manages, develops and operates certification, education and related programs for financial planning organisations worldwide and owns the CFP certification mark.
Referring to the Australian CFP curriculum, Maye said, “Globally, we are catching up with Australia.”
He said Australia has had the financial plan component for some time.
“In looking at the best practices around the world, our feeling was we really needed to embrace that all over the world,” he said. The FPSB will be looking at how that will be implemented by engaging with universities or the Financial Planning Association of Australia.
In looking at the industry barriers to entry, Maye said regulation varies across the world.
“Certainly around the world there is plenty of variability as to what people have to do, or do not have to do, in order to provide advice and products,” he said. “While some may feel that RG 146 [in Australia] is too low, some people may have failed to get in at that level — so at least it’s keeping some people out.”
Maye said currently in the United States, those who want to practice as an investment adviser representative have to take a competency exam, which is quite significant.
“Prior to that, the statement was that you needed $150 and ‘breath’ and you would be registered,” Maye said.
He added there was an evolution taking place and that there would eventually be a shift towards valuing advice and valuing the principle that people need to be competent to give that advice.
“Regulators around the world are moving away from this idea that you have to take a knowledge exam or you have to know products; they are starting to see what qualifies you to operate in that area.”
He said when the approach shifts to a competency set, that’s when the industry itself gains the ability to start pushing standards upwards.
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