The Financial Services Council has moved to sideline ASIC and the industry associations with the establishment of an independent, government-led advice standards board.
The FSC first called for the establishment of the Advice Competency Standards Board (ACSB) in its second submission to David Murray’s Financial System Inquiry.
The concept has now been fully fleshed out in the FSC’s submission to the parliamentary joint committee’s inquiry into adviser ethics and education standards.
If established, the new standards board would take away ASIC’s current power to mandate education and competency standards for financial planners.
“We’re a bit ‘purist’ in that we think the people who enforce the law shouldn’t write it,” Mr Brogden said.
The FSC has already had conversations with the Association of Financial Advisers about the proposal and the association is “realistic about how far self-regulation can take this debate”, said an FSC spokesperson.
The Financial Planning Association (FPA), on the other hand, has been “non-responsive to date”, Mr Brogden acknowledged.
“I’m not critical of the [FPA’s Certified Financial Planner program]; I just think that in order to get the trust we need, people need to trust [planners] more than [is possible via] a professional body of financial advisers,” he said.
Discussing the submission in Sydney yesterday, FSC chief executive John Brogden acknowledged it was “somewhat self-effacing” for his organisation to be calling for yet more regulation.
“It’s a recognition that the level of trust is at an all-time low in financial advice,” he said.
“Recent events have rocked public confidence in financial advice, and we need to be zealots for better standards and better education,” Mr Brogden said.
The ACSB would be subject to ministerial appointments with representatives from industry association and regulatory bodies (such as ASIC and the Tax Practitioners Board).
“Self-regulation is no longer a credible option for establishing higher standards,” Mr Brogden said, adding that the creation of the new regulatory body would “obviously leave [the current financial planning education standard] RG 146 in the shade”.
The ACSB would be funded by the industry, with the FSC happy to reach into its pocket to finance the board.
"We’d be happy to fund it if there was a levy," said Mr Brogden.
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