While the qualifications for financial advisers are adequate, the approach to education is flawed for such a high consumer risk occupation, according to a government body.
In a submission to the parliamentary joint commitee inquiry into adviser standards, the Professional Stamdards Authority (PSA) said it is likely there is a “larger systemic failure in the education/quality system of the industry”.
The PSA is the government agency representing the Australian government's Professional Standards Councils and is headed by former FPA chief professional officer Dr Deen Sanders.
The submission said the systemic failure of educational standards includes issues such as “poorly constructed educational standards [with] generic expectations that do not capture the technical or professional requirements across a diverse industry sector”.
The submission also argued there is insufficient assessment or content quality controls by Innovation & Business Skills Australia and the Australian Skills Quality Authority.
The inability or unwillingness of ASIC to assess program quality or support and encourage improved education programs or quality mechanisms is also an issue, according to PSA.
PSA said licensees have also failed to “suitably scrutinise or quality control advisers, education and providers”.
The submission made a number of recommendations, including an alteration to reward and remuneration practice to incentivise consumer protection; building a professional standards and oversight system; and codifying separate professional, sales, technical and service roles.
The PSA said the government should introduce new models of licensing, separate advice and manufacturing licence models and incentivise professionalism and individual obligation.
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