The Financial Services Council has called for new architecture of the financial advice industry in order to increase consumer confidence in the advice profession.
In its response to the interim FSI report, the FSC said there needs to be a revised model for financial advice which includes an Advice Competency Standards Board to oversee the development of competency standards, adviser education and a register of advisers.
“Significantly improved adviser education, increased ASIC powers and greater disclosure of experience and ownership are needed to increase public confidence in financial advice,” FSC chief executive John Brogden said.
“The FSC supports an enhanced public register of advisers which discloses the ultimate owner of the licensee.
“Consumers have the right to know the ownership and alignment of the adviser they are dealing with. The register should disclose the education, experience and history of advisers,” Mr Brogden said.
The FSC has also said it is “critical” there is greater clarity on the definitions of financial advice.
“Better definitions and labelling of advice and sound architecture for building competencies are critical to gaining the trust and confidence of consumers,” Mr Brogden said.
“We have recommended the Murray Review considers a model which establishes clear segments of personal advice, general information, factual information and intrafund advice and for new adviser competencies to address these segments.
“Our revised model for advice clearly distinguishes between personal advice and information and ensures consumers will receive appropriate advice from advisers with appropriate competency and skills,” Mr Brogden said.
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