The Australian Securities and Investments Commission (ASIC) has requested feedback on a new training and assessment framework for financial advisers.
The consultation paper, titled ‘Licensing: Training and assessment framework for financial advisers’, was released last week. It addresses issues identified in ASIC’s review of the present training and assessment framework.
Greg Medcraft, ASIC Commissioner, said: “Our review identified concerns about current training standards and highlighted that change is required to increase consumer confidence in the financial advice industry and to encourage professionalism.”
change is required to increase consumer confidence in the financial advice industry
“The proposed framework for assessment and professional development is designed to improve the quality of advice by ensuring that all financial advisers achieve a uniform minimum standard that is consistent with developments in the industry both here and overseas,” he said.
ASIC proposes amending the assessment and professional development framework for financial advisers.
Under the proposal:
- All new and existing financial advisers who provide Tier 1 financial advice would be required to pass a Financial Services Competency Certification exam to ensure they have the requisite competencies to perform their role. This would be considered ‘Entry Stage’.
- Following Entry Stage all new financial advisers would be subject to supervision by someone who has at least five years experience in the industry, for a minimum period of one year full time (or equivalent).
- All financial advisers would need to undertake a Knowledge Update Review every three years on changes to laws, market issues and new product.
- Finally, all financial advisers would be subject to ongoing continuing professional development requirements.
Feedback on the consultation paper is due by 1 June 2011.
In addition, an extension has been granted on the issue of financial planners providing tax advice, with the Minister for Financial Services, Bill Shorten, announcing the current exemption will be extended to 30 June 2012.
The Minister met with financial planning, tax and accounting bodies, the Treasury, the Tax Practitioners Board (the Board) and ASIC last week, to agree a broad set of principles that will be used to develop regulatory arrangements for financial planners who provide tax advice within the context of providing financial advice.
“I am encouraged by the enthusiasm and constructive engagement of industry in this consultation process. The agreement of the key elements of a practical model will benefit the finance, tax and accounting industries. For consumers, this means they can expect to receive quality financial planning services that include competent advice on related tax issues,” Mr Shorten said.
I am encouraged by the enthusiasm and constructive engagement of industry
The meeting participants agreed a number of points to be implemented as part of the regulatory model. They include the determination of the scope of services that can be provided by financial planners.
According to the proposal financial planners that wish to provide tax advice would need to obtain additional registration. To attain these competencies financial planners would be required to have certain tax related qualifications to ensure that quality advice is provided.
The Minister said the details of the model will be developed in consideration of the Future of Financial Advice reforms.
Treasury, in consultation with the Board and ASIC, will continue to develop the model, with further industry consultation expected later in the year.
