In June this year, ASIC released Consultation Paper 212: Licensing: Training of financial product advisers – Update to RG 146 (CP 212), which proposed to phase in a requirement for degree-equivalent training for new advisers from 2019, but left gaps in terms of quantifying various learning requirements and drew criticism over a loophole potentially allowing those requirements to be circumvented by completing a proposed national exam, as suggested in a previous paper, 2011’s CP 153 (which is currently on hold).
In August, ASIC released Consultation Paper 215: Assessment and approval of training courses for financial product advisers: Update to RG 146 (CP 215), in which ASIC proposed to scrap the current registered training organisation (RTO) training register, admitting it only conducted cursory assessments of courses and as such the measure did not add value, and also arguing it was not equipped to be an education regulator as well as a corporate regulator.
Responding to the specifics of ASIC’s papers, the FPA agreed minimum education standards needed to be lifted, but did not support the approach taken by the two papers.
“The FPA notes that ASIC representatives have stated on a number of occasions that the corporate watchdog is not an education regulator. However, as ASIC mandates minimum training requirements, licensees and financial planners look to satisfy ASIC, not the education regulators, when determining whether a course meets the minimum standards, or whether a financial planner is trained and competent to provide advice to consumers,” the FPA argued.
Through its work with education regulator the Australian Skills Quality Authority, as well as RTOs, “ASIC strongly influences and even dictates the course curriculum, and as such is acting in the education regulator space”, the FPA submission stated.
The proposed closure of the ASIC training register exacerbates an issue whereby there is a lack of portability of training, and licensees are imposing their own standards. With no viable equivalent and CP 153 currently on hold, it will be difficult, time consuming and costly to assess adviser compliance with RG 146, the FPA said.
The current “piece-meal approach” to regulating training standards suffers from a lack of an overarching framework and contains “unworkable, incompatible and inappropriate requirements being proposed, as well as gaps in the holistic system needed to ensure an increase in planner competency is achieved”. the FPA said.
“A holistic and coordinated framework must be developed by a forum of representatives from ASIC, the Tax Practitioners Board (TPB), the financial planning profession, and the education sector.”
The FPA said a future education framework, which should be developed by a financial planner education working group (FPEWG), would tie in all elements relating to RG 146, CP 153’s proposed national exam, and requirements under the Tax Agent Services Act (TASA) regime.
It would also cover elements of compliance, self-regulation, the responsibilities of licensees versus professional bodies for initial and ongoing education, the role of continued professional development (CPD), operation and regulation of the education sector, education course specifications, and appropriate terminology.
The group would include representatives from ASIC, Treasury and the TPB, as well as a variety of stakeholders representing professional bodies, educators and education regulators, and licensees.
