A national exam for financial planners would potentially cost around $300 per head and would be conducted by industry bodies who set the questions, according to the head of Australian Securities and Investments Commission (ASIC).
ASIC chair Greg Medcraft made the comments at the public hearings of the Senate inquiry into the performance of the regulator in response to a question as to whether standard levels of knowledge were applied across the financial advice sector.
“We saw training in Australia as fragmented but it is not the job of ASIC to micro-manage training. We can manage outcomes but how we get there may vary; however an exam is more efficient and equitable,” Medcraft said.
When asked what resources ASIC would need to roll-out an exam across the financial advice sector, Medcraft stated ASIC could deliver a national exam at $300 per head with the industry administering the exam and setting the questions.
He stated that if an exam was delivered across the country it would assist in improving the advice sector and the cost of the exam would mean a “great deal for the savings of the country”.
ASIC deputy chair Peter Kell said ASIC still had some issues around adviser competencies such as the level at which they should be set and how they should be tested.
“In consultation with the industry we found that those who provide personal advice should have a tertiary qualification and they can show that by sitting a national exam.”
Medcraft said a national exam would also provide Australian advisers with levels of mutual recognition with the US and Canada, and their status would be recorded on a register as an “effective system for holding people accountable”.
Kell said at present ASIC did not have the ability to track advisers, especially employee advisers, and believed there were 14,000 to 15,000 within the advice sector.
“If we have a register it would allow us to see who they are, who they work for and where they are going. It would give a picture of industry to employers and consumers as well.”
The Financial Planning Association and the Association of Financial Advisers rejected the implementation of an exam during the Senate inquiry hearings claiming it would only assess an adviser’s technical knowledge but not their competency to give practical advice.
