Let advisers set exam, FASEA told

In a communication to FASEA chief executive Deen Sanders, seen by ifa, AIOFP executive director Peter Johnston has outlined a number of proposals that his board believes would alleviate any “negative impacts” the mandatory standards regime may have on the financial advice industry.

First, Mr Johnston argued that the yet-to-be-introduced national examination – which was specified as part of the Corporations Amendment (Professional Standards) Bill 2016 – should draw heavily on input from financial advisers.

“We are advocating that the examination content is compiled by a panel of experienced advisers, not academics unless they have operated at the ‘coal face’ of delivering advice to clients,” Mr Johnston wrote.

“Academics have a propensity to focus on high level information/knowledge that is irrelevant to both consumers and advisers with their day to day activities.”

The AIOFP also argued that FASEA and educational institutions should take past qualifications and work experience into account when determining the final verdict on professional standards for existing advisers.

In order to reduce the cost of up-skilling where necessary, FASEA should consider recognising courses offered by registered training organisations (RTOs) as well as tertiary education institutions, the email suggested.

“The vastly more efficient business model of RTOs can greatly mitigate the cost of courses whilst delivering comparable material and outcomes to universities,” it stated. “This cost saving will assist the operation of the practice and will also benefit consumers with reduced fee charging going forward.”

The email also argued that FASEA should acknowledge that consumer harm in the financial system is often the fault of product manufacturers rather than financial advisers.