SIAA rejects ‘unnecessary’ FSC practicing certificate proposal
The Stockbrokers and Investment Advisers Association (SIAA) has disagreed with the Financial Services Council (FSC) around its recommendation for a practicing certificate framework.
In the FSC’s Green Paper on Advice Licensing report, released in July, the FSC said there is a lack of individual accountability when it comes to tracking advisers’ professional history.
As a result, the FSC had recommended ASIC could introduce an advisers skills and performance registry which could prevent ‘phoenixing’ where advisers with compliance failings re-establish themselves as self-licensed. It also recommended consultation on the feasibility of a practicing certificate model confirming their qualifications and CPD.
It wrote: “Unlike other professions that maintain publicly accessible registers of individual practitioners, financial advisers are not as easily identifiable outside of their AFSL affiliation. While the Financial Advisers Register provides some level of visibility, it is tied to the licensee rather than the individual’s long-term record. This can create challenges in tracking an adviser’s history, especially if they move frequently between licensees.”
However, in its response, SIAA disagreed this was the case and said its member firms already spend “considerable” time on maintaining FAR records for their staff.
“Our objection to this proposal is that there is already a centralised and comprehensive financial adviser register (the FAR) that is a publicly available via the ASIC Moneysmart website of people who provide personal advice on investments, superannuation and life insurance. It contains details of advisers’ qualifications and employment history. Historical data on retired advisers can also be accessed.
“Our member firms are currently spending a considerable amount of time and incurring not inconsiderable costs to update the register so that it contains a comprehensive history of each adviser’s qualifications and work history.
“We therefore consider that introducing an adviser skills and performance registry as proposed would be an unnecessary duplication of effort that would impose a significant additional administrative burden on licensees for no benefit to either consumers or advisers.”
When it came to a practicing certificate model, the FSC had argued this would encourage advisers to have greater ownership of their actions and ensure they are meeting regulatory requirements and their professional expectations.
But SIAA felt its member firms are already actioning this as part of their professional indemnity (PI) insurance checks to ensure advisers are fit and proper.
“We also consider that imposing another step in registering an adviser will add to a licensee’s regulatory burden and costs without any benefit to the adviser or the licensee.”
Regarding a recommendation that internal action taken by AFSLs should be made public, SIAA said this would be a “backward step” for the industry nor should matters decided by the Financial Services and Credit Panel (FSCP) be made public.
“We strongly disagree with the proposal that internal disciplinary actions by licensees should be made public. We consider that such a proposal would represent a backwards step in compliance and act as a strong disincentive to licensees to undertake internal disciplinary actions against their advisers if they thought that the outcome of those actions would be made publicly available on an adviser’s record.”
It noted ASIC is already working on collating the education and experience pathway data from AFSLs and intends to undertake a compliance program to strengthen FAR data about advisers’ professional histories in 2026.
“We therefore encourage the FSC to become informed about the work being undertaken by the regulator to address any lack of transparency about the professional histories of financial advisers.”
AUTHOR
Laura Dew
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