Careful selection required for standards body: Mentor Education

In a statement, the financial services training company said the changes made in the government's revised draft bill – which include increasing the number of directors on the Professional Standards Body (PSB) from seven to nine persons – will be a "plus" for the industry.

It is important, however, that Assistant Treasurer Kelly O'Dwyer appoints nine "highly credentialed representatives", said Mentor Education managing director, Mark Sinclair.

"The Minister also needs to ensure that the three financial planners who become PSB directors are highly respected by their peers and have experience that reflects the full diversity of advice that a comprehensive financial planner may provide," he said.

"That would go a long way to ensuring that the deliberations of the body translate into concrete and effective educational outcomes."

Mr Sinclair added that there are concerns that the body may become a special-interest group, engage in 'mission creep' or overlap with ASIC's role in regulating the industry.

"These concerns are valid but with careful design and selection, [they] can be overcome," he said.

"Very strict and limited terms of reference on its role are required, especially in relation to ASIC and education providers to prevent sub-optimal education standards.

"The PSB could also be de-risked by ensuring that the appointed educationalist has strong and relevant expertise in the design of tertiary degrees and training, to ensure that each of the 24 subjects in a Bachelor of Financial Planning degree cover the education requirements needed by the adviser of the future."