The FSC has laid out its case for an Advice Competency Standards Board in its submission to the parliamentary joint committee inquiry into ethical and education standards for financial planners.
Speaking at a lunch in Sydney yesterday, Mr Brogden acknowledged that it was “somewhat unlike” an organisation such as the FSC, which represents the major banks and AMP, to “ask the government to create a new bureaucracy”.
“This is somewhat self-effacing for us,” Mr Brogden said. “It’s a recognition that the level of trust [in planners] is at an all-time low in financial advice.”
Recent events such as the CBA financial planning scandal have “rocked public confidence in financial advice” and the FSC needs to be a “zealot” for better standards and education, he said.
“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 board would be funded by organisations like the FSC and staffed via ministerial appointment, along with representatives from organisations like the Tax Practitioners Board.
If established, the new standards board would take away ASIC’s current power to mandate education and competency standards for financial planners, Mr Brogden said.
“We’re a bit purist in that we think the people who enforce the law shouldn’t write it,” he 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”, according to 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.
“I’m particularly disappointed for those that have been good advisers and have done the right thing. They’ve all been dragged down by recent events.
“The only way that we think we can restore trust is to put in a new regime that has a very clear statutory government oversight,” Mr Brogden said.
