The financial advice industry needs a self-regulatory organisation (SRO) to independently set education standards, says Finsia CEO Russell Thomas.
In an op-ed article published in The Sydney Morning Herald, Mr Thomas explains that the current RG146 system has deficiencies and allows advisers to “bluff their way through” creating a “race to the bottom” in terms of adviser standards.
Mr Thomas argues that an SRO structure would allow an independent yardstick of adviser standards to be set, while “professional membership such as Finsia and the FPA” would continue to foster discussion about what those standards should be, along with universities and education providers.
“The [FOFA] reforms have gone some way to address conflicts of interest and remuneration structures, but so far have failed to address public confidence in the knowledge, skills and ethics of financial advisers,” Mr Thomas wrote.
“Tougher standards and a national examination would help restore consumer confidence in the probity and rigour of financial advice.”
While the association chief conceded that his proposal is not a “silver bullet”, he argued that a self-funded SRO and examination would help build “public trust”, adding that the current political climate is appropriate for such as push.
“For many Australians, the perception of the entire financial services industry is shaped by the quality of financial advice they receive,” he said.
“If ever there was a chance to clean up the sector and impose higher technical and professional competency standards, then now is that time.”
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