A 400,000-member-strong trade union has accused financial institutions of raising adviser education standards just to appease “public sentiment”.
In a submission to the parliamentary inquiry into advice standards, the Finance Sector Union questioned the motives behind announcements of higher minimum adviser standards by institutions such as AMP, CBA and NAB.
“While the move by some Licensees to self-impose higher education standards is a step towards having a better educated system, it would appear at a surface view these changes have been brought about to address the current public sentiment, in particular the distrust of financial planning, [rather] than to do with any genuine attempt by licensees to better the integrity and transparency of the industry,” the FSU’s submission argued, adding that RG146 can still be “achieved in under a week”.
The submission said that while efforts to increase education standards may result in a “positive outcome for many consumers” it adds that there is “still the gap that an increased education standard would not address”: conflicted remuneration.
The FSU calls for “delinking the planner/organisation from the financial benefits associated with ‘specific’ product sales”, arguing that the structural separation of product and advice cannot be achieved by higher education standards.
At the same time, however, the union recommends that the government raise education standards in the financial planning industry to a degree minimum as well as calling for the introduction of a national examination.
The FSU also backed the government’s proposal of an adviser register and the concept of a “national uniform code of conduct” for the industry.
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