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".
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.
