A national examination for financial planners would be an inadequate measure of their competencies and should not be implemented according to CPA Australia (CPAA) who has called for increased levels of education built around a new core curriculum.
In its second round submission to the Financial System Inquiry the association also called for the inclusion of an up-front disclosure requirement by advisers in the event they recommended a related product or a product from a restricted product list.
CPAA said while it supported the lifting of training requirements for advisers it did not support a national exam as it would not assess the "application of both the knowledge and skill required to adequately perform duties relevant to the role of providing financial planning advice".
"While a national examination may be an objective method to ensure all advisers can in fact demonstrate a minimum level of knowledge, we do not believe it will ensure a financial adviser has the requisite competency to perform their duties," CPAA's submission stated.
"Competency is the ability to perform tasks and duties to the standard expected in employment. An examination traditionally assesses an individual's knowledge."
CPAA stated that it would support a move for the current minimum level of education to be lifted to a degree level, an idea first proposed by the Australian Securities and Investments Commission in July 2013.
However CPAA rejected carving out training on self-managed superannuation funds as a specialist knowledge area arguing they were "an integral component of the superannuation industry and this should be reflected in the topics required to be covered for superannuation".
The submission also stated that advisers should work with a revised disclosure regime which moves any mention of related product advice from documentation to a verbal statement provided at the time of advice, with the advice and product recommendations presented as two separate components.
CPAA stated this would result in advisers being able to provide strategic advice without product influence, enable them to disclose conflicts of interest before enacting that advice and allow clients to questions the adviser on the reason for choosing the product and the benefits the adviser may receive.
