The Government will need to be careful in selecting those who make up the Professional Standards Body (PSB) covering the financial advice industry, particularly the three financial planners, according to Mentor Education managing director, Dr Mark Sinclair.
Discussing the Government's released revised draft legislation covering the PSB and its expansion to nine people, Sinclair said not only would the new body need to define robust and transparent academic and ethical requirements, it would also need to guard against mission creep.
He said that while the legislation necessary for the establishment of the PSB had been delayed until after the election, some were concerned that it did not become an additional special interest group or engage in mission-creep and perhaps even overlap with the Australian Securities and Investment Commission's (ASIC's) role in regulating the industry.
"These concerns are valid," Sinclair claimed. "But with careful design and selection, can be overcome."
He suggested this could be achieved via very strict and limited terms of reference on its role, "especially in relation to ASIC and education providers to prevent suboptimal education standards".
"The PSB could be also be de-risked by ensuring that the appointed educationalist has strong and relevant expertise in the design of tertiary degrees and training, to ensure that each of the 24-subjects in a Bachelor of Financial Planning Degree cover the education requirements needed by the adviser of the future," Sinclair said.
"The Minister also needs to ensure that the three financial planners who become PSB directors are highly respected by their peers and have experience that reflects the full diversity of advice that a comprehensive financial planner may provide," he said.
Sinclair suggested this would go a long way to ensuring that the deliberations of the body translated into concrete and effective educational outcomes.