A newly released consultation paper upgrading the minimum financial planning qualifications appears to have left a loophole whereby a single three hour exam could supersede any upgraded training requirements.
On 24 June the Australian Securities and Investments Commission released Consultation Paper 212, Licensing: Training of financial product advisers - Update to RG 146 (CP 212), which looks to install a bachelor’s degree equivalent as the minimum level of study for new advisers from 2019.
However CP 212 ties the new standards into the previously released CP 153 consultation, which proposes implementing a national annual exam for all advisers based on the upgraded RG 146 requirements.
Worryingly, according to Dr Mark Brimble, associate professor (Finance) at Griffith University, if that national exam is implemented there will be no requirement to do a specific training course related to RG146.
Based on the latest proposed measures, “the national exam would supersede any particular education requirements, and it would be up to the individual applicant sitting the exam to educate themselves through a training course or their own private study,” Dr Brimble told ifa.
Discussions so far have suggested that exam would take the form of a three hour online multiple choice exam.
“You could pass a three hour exam with no particular formal study… and if you pass it you’re away,” Dr Brimble said, which he described as “rather alarming”.
“I wouldn’t even know where to begin in terms of the concern that would raise relative to what [financial planning educators are] trying to achieve and what this [CP 212] document is trying to achieve in terms of education requirements, knowledge requirements and skills requirements,” he said.
Dr Brimble questioned how the skills component of the proposal would be assessed under a CP 153 national exam if there is no requirement to complete course of study built into those skills requirements.
While acknowledging the new document is still in consultation form he said the exam exemption appeared to undermine the whole document.
The industry has long suffered from criticism that the under-regulated RG 146 regime allows a practitioner to become a qualified financial planner in as little as a few weeks of study (with registered training organisations free to assess their own graduates), leading to uncertainty over the actual capability of those with the minimum level of study.
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