The Advisers Association believes it is time to set a higher education bar for those delivering general advice and ‘simple’ advice.
A statement from TAA says that with general advice set to remain in play under the Quality of Advice Review, albeit in a more restricted form, and non-relevant providers likely to be able to give ‘simple’ advice, it believes now is the time to set a higher education bar for those delivering these forms of advice.
TAA CEO, Neil Macdonald says the current minimum requirement for people giving general advice is RG146 which was “…an accreditation for its time.”
Following the QoA Review “…we will move into a new era for financial advice, an era of growing consumer needs and greater consumer expectations. To meet these needs and expectations, we believe RG146 should be upgraded with AQF7 or AQF8 level assessed topics.”
TAA says the QoA Review proposals also indicate that individual non-relevant providers will be left to decide what training and education is required for their employees to give simple, ‘good advice’.
…people won’t know what they don’t know
Macdonald says the association thinks this would likely result in inconsistent outcomes for consumers, “…as people won’t know what they don’t know.”
The association therefore thinks that providers across the industry could agree on a common requirement, such as an upgraded RG146, for people giving ‘general advice’, and for the staff of ‘non-relevant providers’ providing ‘good advice’.
Minimum Consistent Standards
“This would result in minimum consistent standards being applied across the industry, which should have the flow-on effect of improving consumer confidence.”
TAA also suggests that when upgraded, the RG146 accreditation, if it is still a regulatory guide, be re-numbered to avoid any previous negative connotations.
Macdonald says that only a few years ago, “…some product providers were saying that RG146 qualifications were inadequate …[but] they now have the opportunity to call for change.”
The association says that requiring an upgraded common standard would give trustees more confidence their employees were appropriately trained and competent.
“Importantly, it would also increase consumer protection, as consumers would be more likely to consistently receive good advice and be better serviced than they currently are,” Macdonald says.
He adds that TAA says all this with a fair degree of caution.
…What we want to avoid is a situation where consumers think they are receiving personal financial advice when …they are only receiving product advice and general information
“What we want to avoid is a situation where consumers think they are receiving personal financial advice when, in fact, they are only receiving product advice and general information.”
For every action, there are consequences.
For instance, the Life Insurance Industry has been decimated, with most experienced specialist risk Advisers leaving the industry due to overzealous Education requirements that were designed so Education entities and lobbyists could generate millions of dollars for themselves, with NIL care for the consequences.
We repeatedly warned what would happen with this insane theory based, utopian vision, with no thought or care of how EXPERIENCED Advisers exiting and holistic Advisers cutting back on writing New Business, would impact every part of the chain, which has led to massive premium increases and a very large Business threat for Life Insurers if this continues.
BE CAREFUL OF WHAT YOU WISH FOR, is a very valid statement and one very few people, or Businesses understand.
I have been shouting from the rooftops for nearly a decade, that there must be a separation of risk from Investment advice and my reasoning has never changed, nor will it need to.
Most people who started in the Life Insurance Industry as Advisers, came from other Industries and even today, after a few years of the brave new world of, “Degree or be damned,” there are very few Uni graduates who have chosen to be risk specialists. WHY?
Because the hoops they were forced to jump through, meant they were not interested in starting their careers as Wealth Protection Advisers. They want to get straight into and play the whole game NOW. There will be insufficient new entrants with their shiny bits of paper who will start in the Advised Life Insurance Industry, so a solution MUST be found, which takes me back to having risk Advice separated from Investment Advice and only relevant Education that is specific to risk, be mandated.
Comments are closed.