Compulsory higher education will bring uniformity: FPA
Enshrining the lifting of education standards into law would ensure that there's a global industry standard across the financial advice sector, according to the Financial Planning Association.
FPA chief executive, Mark Rantall, said that while many institutions are voluntarily lifting professional and education standards, it will not be effective unless the entire industry rallies behind it instead of certain sectors transitioning in isolation.
Rantall said that while there is a small minority of examples of poor advice, that has the effect of tainting an entire industry.
"Unfortunately, the minority of bad apples will have an effect so lifting standards from a legal stand point will ensure that that happens right across the industry," he said.
The comments back the Financial System Inquiry recommendation, which said low minimum competency standards have been an industry staple, and the Government needs to prioritise reviewing them.
Education can aid in lifting ethical standards but Rantall opined that structural separation of product sales from independent advice is vital, and institutions should have mechanisms where conflicts can be managed and avoided altogether.
"While culture doesn't change overnight, it can definitely change and once the leadership of these organisations moves towards different cultural settings as they have been, cultural change happens quite quickly," he said.
"Giving advice that generates sales but is not in the client's best interest is no longer acceptable and is against the law."
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