Time to rethink licensing for planning and risk
Consumers would be better served if financial planners and risk advisers were required to hold separate licences, Synchron director, Don Trapnell, believes.
Speaking to Money Management, Trapnell said that while there were "outstanding financial planners who give very good risk advice" and quality risk advisers who provided good financial planning advice, they had different educational needs.
"We had it right before the Financial Services Reform Act (FSRA)," he said.
"Pre-FSRA you would have a company like Synchron, we had two licences, we had a life insurance licence and we had a licensed dealers and securities licence.
"That means that the education requirements for example for a risk writer specialist would be channelled in the risk area and not watered down by the necessity to have extemporaneous knowledge of financial planning that does not fit within the skill set he or she needs.
"Likewise a specialist financial planner does not need to have in depth risk knowledge if they are going to refer a risk case on to a risk specialist.
Trapnell rejected suggestions that restructuring the licensing of risk advice and financial planning would create more administration, stressing the move would lead to better advice for consumers.
He said financial planners and risk advisers would still be required to complete 30 hours of continuing professional development, but the training would be "directed more appropriately to their needs and the needs of their clients".
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