Insignia has recommended that advisers are issued with a “practicing certificate” by a central regulated body to ensure all advisers are subject to the same requirements and assessed against the same level of standards.
In its submission to the Quality of Advice Review, Insignia said this would “improve confidence and trust” in advice.
“Consumers should know their adviser has been assessed as fit and proper by a regulated body that ensures all advisers are subject to the same requirements,” the submission reads.
“This body or bodies should issue practicing certificates,” Insignia continued.
The model the firm is proposing would see the AFSL regime remain, but the body or bodies that issue the practicing certificate would ensure advisers are “fit and proper”, meet initial and ongoing training requirements, and have no unpaid AFCA determinations or serious compliance concerns.
“Advisers would be unable to be authorised or employed by an AFSL or registered with the single disciplinary body unless they had a practicing certificate,” Insignia explained.
It suggested that the certification process could mirror that adopted by other professions, such as solicitors and accountants.
“Insignia Financial believes consumer needs exist along a continuum and the regulatory system does not currently meet consumer needs. This leads to poor client experience and a lost opportunity for Australians to benefit from receiving financial advice to improve their financial wellbeing,” the firm said.
“The changes to advice regulation suggested above would help ensure more Australians seek and receive quality advice that is accessible and affordable, to help improve their financial wellbeing,” it added.
Late last week, the minister for financial services backed the Quality of Advice Review, emphasising the “important opportunity” it provides to “streamline and simplify” the regulatory settings.
Mr Jones disclosed that as part of delivering on the government’s commitment to ensure Australians have access to “high-quality and affordable financial advice”, he recently met with the independent reviewer Michelle Levy.
“I am pleased with the progress of the review, and the significant contribution that the financial advice industry, consumer bodies and regulators have made to the review’s progress to date,” Mr Jones said, adding that he supports the review continuing under the current Terms of Reference.
“I look forward to receiving the Review’s final report and recommendations on 16 December 2022,” the minister noted.
Alongside the review, Mr Jones said he remains committed to “looking at reforms now to assist financial advisers in being able to meet the needs of their clients including the education requirements for experienced financial advisers”.
I think this article will come back and bite them in the backside when ASIC eventually wake up from their coma and comes knocking. We have a certifier its and audit.
The answer like other professions is a professional body. CPA, CAANZ etc for accountants. NSW and other states Law Societies for lawyers. Institute of Actuaries. We must start using the lens of professions to solve for the future.
This just sounds like Insignia are trying to pass the buck to some one else should their advisers stuff up
I’m confused. All advisers need to be registered with ASIC. Why are Insignia proposing another body? Further, why if this is other body certifies we are ok to practice, should we need to be registered with an AFSL?
As usual look for the vested interest.
That is rich coming from IOOF!
Isn’t this something FASEA was supposed to fix?
Sounds like a big end of town argument from I00F (sorry Insignia). it also sounds like FASEA revisited.
Remember FASEA was funded to the tune of $11 million for its first three years of operation by the big banks, NOT the Government. WHY? Back then, the banks had clearly rationalised that, using FASEA as a blunt instrument, that they could reduce the number of self-employed financial advisers, by encouraging the government to adopt FASEA, and making it look even more attractive by funding it for the first term. Well that worked a peach!
The banks knew that they had the capacity in their advice businesses to be able to cope with bringing on and mentoring new advisers that were unable to produce revenue for at least a year, something very few small business advisers could afford. The banks were compelled by the idea of eliminating the self-employed adviser business. The banks found a compliant idiotic group of ministers who had in the past been associated with the banks themselves, who contrary to their so-called Liberal party philosophies, hated small business advisers.
FASEA looked like a great idea to the banks, because it could be dressed up under the “professionalism” banner. For once, the banks engaged in long term thinking, driven by the amount of reparations they were being compelled to offer for poor advice. The plan also involved selling life insurance Businesses, exiting the advice industry (under fire for poor advice), and as most now expect, re-emerging soon with a Robo advice model, flogging cheap and nasty products in the next year or so, after our next recession. Eventually the banks were forced to give into the pressure for a Banking Royal Commission, but saved themselves by suggesting the terms of reference, with a plan to return another day in more controlled circumstances, favourable to the banks.
Lawyers tell me that a practising certificate takes 24 months to obtain for someone with a fresh law, or arts/law degree, but the “newbies” are able to charge fees while practising under supervision, at a lesser rate.
There is nothing in this announcement which addresses the issue of existing experienced advisers. We’ve all been through the nonsense that is FASEA, with its ethical principles overriding chapter 7 of the Corps Act. There is nothing in this submission for specialist advisers – risk Specialist advisers, stockbrokers and aged person accommodation advisers. Are we to incur once again the nonsense of a single one-size-fits-all examination which ignores the practicalities of the specialties of our industry?
I think this idea should be seen in fact as rejecting Minister Jones previously stated aims of issuing a certificate of some sort after 10 years of practice without any complaints or AFCA appearances. It’s yet another big end the town argument!
So you don’t think asic has the ability to do this job or are they to be deleted and a new body steps in. How much $$$$ more cost and control and red tape or do you have toooo many advisers to supervise correctly and handing the responsibility to a third party. Or was this just a brain moment without thought. One only controlling and licensing entity or here we go again with more blockages and cost. The review is to hopefully simplify and reduce cost, not add to it. Cheers mate, await your reply to clarify your position.
More costs…just what we need.
Practicing certificate – thought that was what a degree was?
As a professional this should not be necessary –
16th of December 2022…the day Financial Planning died…..replaced by an “adviser” sitting behind a phone, working in a Union Super fund call center, getting paid bonuses, to pump monies into super funds without any consumer protection documents all for free…..I mean to use the words of our new Minister in December, “these changes provide comprehensive, tailored, affordable and scalable advice on a wider range of issues to a broader and wider range of Australians”
Under FASEA you won’t be able to charge your fee and take 5 appointments, to help someone when they’re giving it away in a 30 minute phone call or an App.
Oh please, just when we want red-tpe reduction here is another over-reach. ASIC are the regulatory body authorising advisers and noted on FAR as far as CPD training is up to date. Don’t throw more paperwork at us