Planning bodies support register but reject exam
Adviser associations would support the establishment of an adviser register but have rejected the implementation of an exam, with the latter regarded as an inadequate measure of an adviser’s competencies.
The Financial Planning Association (FPA) and Association of Financial Advisers (AFA) made the comments at the public hearings of the Senate inquiry into the performance of the Australian Securities and Investments Commission (ASIC).
FPA chief executive Mark Rantall said “a point in time exam is not the cure to the ills of industry and it would take some time for industry to get to a higher level”.
AFA chief executive Brad Fox also rejected the introduction of an exam, stating it was a technical memory test and not an adequate measure of the ability to provide practical advice.
“An exam every three years is not consistent with adult learning principles and is a memory test. We believe entry levels need to be raised and we have an old advice population and need time to move new advisers into the profession.
“We think ongoing education and competency is a better model to adopt and a written exam is not sufficient. People need to be mentored into planning role. It is not their technical ability that should be questioned but their ability to apply it to real life and people.”
Rantall said any provision of the exam would be overreach by ASIC, which did not have the resources. He said that training should be provided by the education sector and certification by professional bodies within financial services.
Both the FPA and AFA stated in response to questions from the Senate inquiry that they supported the creation of a register of financial planners and advisers that would track their movements, training and status within the industry.
Rantall added that banning advisers who had broken the law would improve the profession - and those bans should also prevent them from being able to operate in other roles within financial planning.
“If someone was banned as planner there were usually good reasons - and then to go on to manage a financial planning firm would not be appropriate.”
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
