TAA urges higher education bar for non-relevant advice providers

With general advice set to remain in play under the Quality of Advice Review (QAR) and non-relevant providers likely to be granted the ability to give “simple” advice, The Advisers Association (TAA) has called for the introduction of a higher education bar for those delivering these forms of advice.

In a statement issued on Wednesday, TAA CEO, Neil Macdonald said that with QAR set to birth a new era of financial advice, the education requirements need an immediate upgrade.

“The current minimum requirement for people giving general advice is RG146,” said Mr Macdonald.

“RG146 was an accreditation for its time. Following QAR, 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.”

Worried that individual, non-relevant providers will be left to decide what training and education are required for their employees to give simple, “good advice”, Mr Macdonald said an agreement needs to be struck to ensure consistent consumer outcomes.

“We think 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’,” Mr Macdonald said.

“This would result in minimum consistent standards being applied across the industry, which should have the flow-on effect of improving consumer confidence.”

Mr Macdonald also suggested that when upgraded, the RG146 accreditation, if it is still a regulatory guide, be renumbered to avoid any previous negative connotations.

“Only a few years ago, some product providers were saying that RG146 qualifications were inadequate and less onerous than those required to be a hairdresser,” Mr Macdonald said. “They now have the opportunity to call for change.”

He believes that requiring an upgraded common standard would give trustees more confidence that their employees were appropriately trained and competent.

Importantly, Mr Macdonald noted, it would also increase consumer protection.

“However, we say 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, in fact, they are only receiving product advice and general information,” he stressed.

Additionally, he noted, common standards would create a wider pool of people who can progress their studies to become fully qualified financial advisers.

“A healthy industry and advice profession needs to get more people into it and build a pipeline of people progressing to becoming fully qualified advisers.”