Financial institutions should not be able to provide any form of education to their own financial advisers with all training to be provided by registered third-party specialised financial services training organisations according to a Sydney based asset consultant.
At the same time courses should be redesigned to avoid perpetuating current business models which promote a culture of sales and instead introduce elements of critical thinking to promote professionalism among planners and best interest outcomes for clients.
The comments were made by Tony Rumble, a former partner at PricewaterhouseCoopers and a consultant to the Ralph Review of Business Taxation, who stated that vocational education currently provided by Registered Training Organisations (RTOs) was mapped to pre-set education requirements and did not consider the calibre of those teaching or the course content.
In his submission to the Financial System Inquiry Rumble said training for initial and ongoing training for financial planners should only be offered by universities or training organisations registered with the Australian Securities and Investments Commission and not administered by state departments of education, effectively removing TAFE level courses and those offered in-house by institutions.
Rumble stated that current adviser training offered by RTOs did not offer critical thinking but was "little more than training to sell products and services which suit existing business models".
He said critical thinking was linked to professionalism and was evident where two professional advisers, faced with the same set of facts, would provide the same advice but that this was not occurring "as the current system of adviser education and licensing did not differentiate between product sales, compared to professional financial advice".
Rumble said that personnel tied to banks and financial institutions should be allowed to sell investment products and earn a fee for doing so but should be restricted from claiming to be providing financial advice and rather state they are performing a sales function only.
