User-pays standards body to boost adviser standards: FSC
Adviser competency and professional standards would be boosted by the formation of a new adviser-funded body that sets standards for different advice segments, the Financial Services Council (FSC) believes.
FSC director of policy and global markets, Andrew Bragg, told the Parliamentary Joint Committee on Corporations and Financial Services, that while the Future of Financial Advice (FOFA) reforms had "substantially changed the structure and operation of the financial advice industry for the better", appropriate competency frameworks were needed for the profession.
Speaking at the PJC's Inquiry into proposals to lift the professional, ethical and education standards in the financial services industry hearing today, Bragg reiterated the FSC's call for the establishment of the "Advice Competency Standards Board" (ACSB) to develop and oversee a "holistic adviser competency framework".
"The purpose of the ACSB would be to set competency standards for the financial advice industry," he said.
"It would be made up of industry stakeholders and… We believe the Board should a have statutory backing which includes regulatory appointees (ASIC and the Tax Practitioners Board) and industry representation.
"It is critical that the framework developed by the ACSB applies to the whole industry.
"This will provide uniformity of competency and education requirements regardless of which licensee an adviser belongs to or whether an adviser is a member of a professional association."
Bragg told the PJC that a "holistic competency framework" established by the ACSB would consistency across the advice sector and ensure that consumers can trust advisers.
"Ultimately our objective is that more Australians can seek financial advice and receive the many benefits that quality financial advice delivers," he said.
"The combination of sensible statutory obligations through FOFA, consistent adviser competency standards and increased transparency through the adviser register will assist us in meeting this objective."
AUTHOR
Nicholas O'Donoghue
Recommended for you
As the year draws to a close, a new report has explored the key trends and areas of focus for financial advisers over the last 12 months.
Assured Support explores five tips to help financial advisers embed compliance into the heart of their business, with 2025 set to see further regulatory change.
David Sipina has been sentenced to three years under an intensive correction order for his role in the unlicensed Courtenay House financial services.
As AFSLs endeavour to meet their breach reporting obligations, a legal expert has emphasised why robust documentation will prove fruitful, particularly in the face of potential regulatory investigations.
