With general advice set to remain in play under the Quality of Advice Review (QAR) and non-relevant providers likely to be granted the ability to give “simple” advice, The Advisers Association (TAA) has called for the introduction of a higher education bar for those delivering these forms of advice.
In a statement issued on Wednesday, TAA CEO, Neil Macdonald said that with QAR set to birth a new era of financial advice, the education requirements need an immediate upgrade.
“The current minimum requirement for people giving general advice is RG146,” said Mr Macdonald.
“RG146 was an accreditation for its time. Following QAR, we will move into a new era for financial advice — an era of growing consumer needs and greater consumer expectations. To meet these needs and expectations, we believe RG146 should be upgraded with AQF7 or AQF8 level assessed topics.”
Worried that individual, non-relevant providers will be left to decide what training and education are required for their employees to give simple, “good advice”, Mr Macdonald said an agreement needs to be struck to ensure consistent consumer outcomes.
“We think providers across the industry could agree on a common requirement, such as an upgraded RG146, for people giving ‘general advice’, and for the staff of ‘non-relevant providers’ providing ‘good advice’,” Mr Macdonald said.
“This would result in minimum consistent standards being applied across the industry, which should have the flow-on effect of improving consumer confidence.”
Mr Macdonald also suggested that when upgraded, the RG146 accreditation, if it is still a regulatory guide, be renumbered to avoid any previous negative connotations.
“Only a few years ago, some product providers were saying that RG146 qualifications were inadequate and less onerous than those required to be a hairdresser,” Mr Macdonald said. “They now have the opportunity to call for change.”
He believes that requiring an upgraded common standard would give trustees more confidence that their employees were appropriately trained and competent.
Importantly, Mr Macdonald noted, it would also increase consumer protection.
“However, we say all this with a fair degree of caution. What we want to avoid is a situation where consumers think they are receiving personal financial advice when, in fact, they are only receiving product advice and general information,” he stressed.
Additionally, he noted, common standards would create a wider pool of people who can progress their studies to become fully qualified financial advisers.
“A healthy industry and advice profession needs to get more people into it and build a pipeline of people progressing to becoming fully qualified advisers.”
This is a very sound position from TAA. The education requirements for general advice do need to be increased. Little chance of this happening when it would impact the Industry Funds which control the ALP
There are many new terms being bandied around. Non-relevant provider is one of them. Good advice is another, although I remember that from the late 1990’s when ASIC considered good advice to be compliant advice. Single-topic advice is another. These are emanating from Ms Levy who seems to not have any idea what constitutes financial advice.
The QAR is just another exercise in offending all conscientious advisers who have worked hard to meet the educational and practice requirements that have been imposed on us for the last two decades.
Letting the perpetrators of the Fox in the Hen-House and Compare the Pair ads to now provide “simple” or “single-topic” or “non-relevant” advice is just opening flood-gates that various reviews and commissions over the last ten years have tried to shut. We are being treated like flotsam on an outgoing tide.
WTF is going on? What in the hell is a non-relevant provider?
They’re like the banks but only dishonest. A non relevant provider is someone like AwareSuper and the person working for a large Super fund, giving holistic advice on everything from super to insurance and debt reduction with ultimately the solution and only solution being to salary sacrifice into AwareSuper . They’ll do this without any qualification, education, paper work and repercussions, all for $250. All because AwareSuper a fund that advertises super funds only cost $1.50 per week, can issue bonds to buy StateSuper that they then right off as a loss, and their balanced fund is 80% in growth assets is considered responsible enough to provide sound advice. In short it will allow ASIC to police a handful of super funds rather than 16,000 advisers, whom they’re hoping will be driven out of business.
What on earth is a “non relevant provider”? The article does not define this unusual term and I’ve never heard the term before. I can’t be Robinson Crusoe on this, can I?
Beyond caring yawn.
Consumers are only interested in you responding to their emails & phone calls. End of story.
With an SOA and 10 pages covering off the fees you are charging according to ASIC
It seems RC, FASEA, LIF etc was just a conspiracy, a ‘great replacement’ of numerous personal advisers, being regulated out of existence, to get to where we are now… sales advisers serving their employer’s best interests
Yes very sensible also change the name from advice, if it’s delivered by a non relevant provider call it Sales Advice
sadly, clients won’t know the difference.
we need a royal commission into the government if someone without qualifications can give personal advice after the last 5 years we have had to deal with.
The Government via Treasury has proven over the last 10 years plus that they are not capable of facilitating suitable and relevant legislation for financial advice. It needs to be run under a new Professional Body and taken off Treasury that have made the Industry a diabolical shambles. I have not heard from 1 adviser that believes the Govt. Dept of Treasury that oversee – ASIC, APRA, ATO and Financial Market Regulation are capable.
follow the money