Remove 'exam' from education draft material: AFA
The Association of Financial Advisers (AFA) has called for flexibility from the standards setting body for new professional standards, saying it should not be limited to a "traditional school-like exam-setting".
In its submission to the government on the revised professional standards framework for financial advisers, the AFA said the standards setting body for the new professional standards should use its discretion to set up appropriate "adult-learning assessment methods" to ensure advisers met competency standards, instead of just exams.
The AFA has called for the word ‘exam' and ‘examination' to be removed from the Exposure Draft material, and instead replace it with "appropriate assessment" or "approved assessment" to give the Standards Body flexibility in creating assessment methods.
The AFA argued that the Australian Qualifications Framework prioritised application of skills and delivering advice in practice and did not necessarily encourage a single pathway of assessment.
"Having ‘exams' as the method of assessing whether advisers can demonstrate that they can apply their higher skills and learning with the required levels of autonomy, judgement, responsibility and adaptability may not result in the outcomes sought by the framework," the submission said.
"The ability to communicate and relate to people, as well as skills and knowledge recall is critical."
The AFA also proposed a mandatory requirement for advisers to become a member of a professional association like the AFA and the Financial Planning Association (FPA), and a consideration for advisers to acquire a designation.
Both the AFA and the FPA called for clarity around who would ultimately be responsible for the advice provided in respect to Section 961B of the Corporations Act 2001, stating that it was not clear whether the responsibility fell on the provisional relevant provider or the supervisor.
If this section was to be amended, the FPA proposed that both the supervisor and the advice provider should bear responsibility for the inappropriate advice.
While the corporate regulator may penalise supervisors with enforceable undertakings, fines or banning orders, this might not be appropriate for the relevant provider.
"It might be an appropriate penalty to extend the professional year of the provisional relevant provider and require them to seek out a new supervisor to ensure they are appropriately supervised," the FPA submission said.
AUTHOR
Malavika Santhebennur
Recommended for you
Inefficient data processes and systems mean advisers are spending over half of their time on product implementation and administration at the expense of clients, according to research.
With the regulator announcing its enforcement focus for 2025 last week, law firm Hall & Wilcox examines the areas which have dropped down the list in priority for the regulator.
South Australian financial advice and accounting business Perks has extended its paid parental leave program from 12 to 26 weeks, putting it on par with big four firms.
Mason Stevens has tapped Investment Trends’ head of growth, alongside two other hires, to bolster its distribution team.
