In their submission to the Senate Standing Committee on Economics’ ‘scrutiny of financial advice’ review, BT Financial Group general manager, advice, Mark Spiers and Westpac head of government and industry affairs Brett Gale wrote that a self-regulatory organisation (SRO) may be an appropriate solution to problems plaguing the financial planning sector.
The submission advocates establishing a non-profit body to oversee adviser standards, to be funded by the industry and accountable to ASIC and the federal parliament.
“The SRO would be a new body that has a clear mandate to set and govern professional, ethical and education standards for financial advisers,” the submission states.
“To be effective, the SRO’s mandate would need to expand beyond the setting of formal education standards.
“[The SRO’s] remit should extend to the development of conduct, leadership and community standards that incorporate appropriate ethical, behavioural and professional responsibilities.”
The submission from the big four bank argues that an SRO should not lobby on behalf of advisers or the industry, but will instead serve to centralise the various training and competency requirements for advisers and act as an objective overseer.
It suggests that this organisation will be responsible for issuing practising certificates for advisers, setting professional standards for licensees and examining levels of transparency across the industry.
The establishment of an SRO of this kind would result in a “narrowed” ASIC that would nonetheless “remain crucial”, the submission states, adding that the government’s adviser register could in time also be transferred from the corporate regulator to the SRO.
In addition, the submission calls for tougher standards for licensees and for changes to the AFSL regime to ensure that “only appropriately resourced and well-governed providers” are able to obtain a licence.
