Education standards called into question
Concerns are being raised about the insufficient oversight of financial planning education standards.
The managing director of the specialist financial sector educational organisation Pinnacle, John Prowse, said it had been his view for a long time that the education system was not policed properly.
“The standard set by [Regulatory Guide] 146 is the diploma level equivalent to one-third of a three-year university course. Any institution that offers courses shorter than one year does not comply with the standards,” Prowse said.
“In my view, breaches have been quite blatant. I sent a letter to VRQA [Victorian Registration and Qualifications Authority], quoting extracts from websites where people have quite openly said ‘we’ll give you a diploma in a fortnight’ and nobody did anything about it,” Prowse said.
Earlier this year, Learning Advisory Services Australia (LASA) was contracted by the Australian Securities and Investments Commission (ASIC) to maintain its training registry. Under the arrangement, LASA receive and assess the applications lodged by education providers and register approved courses.
The quality of the courses is assessed by LASA against the requirements of ASIC Regulatory Guide 146 (RG 146). Institutions are required to reregister their courses every three years. The regulator has the power to deregister courses that do not comply with RG 146, and LASA acts upon its instructions.
Information obtained from ASIC shows the commission has, on occasions, refused the registration of a number of courses on the basis that the course had changed and no longer met the standards.
Prowse said that although a lot of education providers were removed from the ASIC training registry last year, the process of registering a course was not complex.
“We submit documents stating what modules we offer and get a tick or don’t. After that, nobody comes out and checks on what you do.”
However, the principal of the Australian College of Professionals, Roslyn Sullivan, said the concerns raised by Prowse were uninformed.
The college offers an RG 146 compliant course that can be completed in as little as three weeks. However, Sullivan said it all depended on the competency level of the candidate.
“If somebody comes to the door with extensive experience in the industry, they are going to finish our course a lot quicker than someone with no experience.
“We assess each person who comes through the door and decide what modules they need to complete.
“Everybody works at their own pace, and just because they’ve spent one year in a classroom does not mean they’re properly educated and competent,” Sullivan added.
You can watch the interview with Pinnacle's John Prowse on Money Management's 4minutes program.
Recommended for you
As Insignia Financial formally completes the separation of MLC from NAB, Money Management reflects back on how the acquisition came to be and where Insignia sees MLC going forward.
The Financial Services Council has made multiple recommendations to ASIC regarding exercising its powers around AFSLs to mitigate the risk of failing companies including greater capital requirements.
Advice licensee Centrepoint Alliance has announced a service partnership with self-managed superannuation fund solution provider SuperConcepts.
The Compensation Scheme of Last Resort says it has received over 200 claims for compensation relating to personal financial advice since its inception and detailed the specific recurring issues being raised by claimants.
