A senior leader in ASIC's financial adviser team says investigations by the regulator have shown many advisers are not "competent" enough to deliver financial advice to investors.
Speaking to ifa about draft legislation for the proposed higher adviser standards, Joanna Bird, senior executive leader in ASIC's financial advisers team, said the regulator wants to see a financial advice sector that delivers accessible, high-quality advice in which consumers and financial investors can have trust and confidence.
"But our surveillances of the financial advice industry have consistently found that many financial advisers are not adequately trained or competent to deliver financial advice to investors. This contributes to poor advice outcomes for consumers," she said.
Reiterating comments made by ASIC chairman Greg Medcraft, Ms Bird said that it supports proposals to lift professional, ethical and education standards of advisers.
"In fact, ASIC has long advocated for an increase in minimum education standards, including a degree qualification and a professional year for financial advisers. We have also strongly argued for a mandatory examination," she said.
At the beginning of December, the government released draft legislation for the proposed higher adviser standards, which states prior learning for existing advisers will be measured by the types of courses advisers have completed, not the number of years of experience they have.
According to the draft bill, by 1 July 2019 existing advisers must either have a degree or have completed one or more courses that give the advisers "qualifications equivalent to the standard".
The courses will be determined by an independent, industry-established body, set to begin operating from 1 July 2016. The body will also develop a code of ethics for advisers, and new CPD requirements.
Further, it will approve the exam that all advisers will need to pass by 2019.
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