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ASIC

ASIC must work “hand in glove” with the financial advice industry

John Hewison
Founder and Director
9 Dec 2014

Last week, Australian Securities Investment Commission (ASIC) Chair, Greg Medcraft took a giant swipe at the financial advice profession at the National Press Club.

One of his more provocative quotes regarding the professional standards of financial advisers in Australia was, “We keep nudging them and we don’t get confidence. There have been enough nudges.”

Under the ASIC Act, the role of the corporate regulator is to maintain, facilitate and improve the performance of the financial system and entities in it; promote confident and informed participation by investors and consumers in the financial system and administer the law effectively and with minimal procedural requirements.

However I would like to point out how little proactive action ASIC is actually prepared to take to protect the public interest. Yesterday Mr Medcraft talked down the need for financial advisers to hold a university degree.

He announced ASIC would like to introduce a national competency exam, which would be left up to financial advisers to decide how they would plan for such an exam. This is an absolute insult to the tertiary qualified financial planners who undertake continuing professional development and training to ensure they are current with all the laws, rules and regulations.

For example, Hewison’s advisers are all university degree qualified, and have completed the Certified Financial Planner (CFP) designation which involves the completion of five rigorous units that are globally recognised as the highest designation for financial advisers. All Hewison advisers are also SMSF specialist advisers, accredited by the SMSF Professionals’ Association of Australia. Some of us have also completed a Masters of Applied Finance at Kaplan Professional, which involved the successful completion of 12 units of study over many years.

I would also argue the comments made by Mr Medcraft have further damaged the reputation of the thousands of legitimately dedicated and highly qualified professionals in the financial advice industry who provide quality financial advice and services to Australians and I personally am fed up with it.

Australia leads the world in regard to education and practicing standards of financial planning. The Financial Planning Association (FPA) has worked extremely hard to increase the professional standards of its members to world-leader status over a period of 20 years. Also, the FPA has consistently tried to convince ASIC to lift the licensing education standards, to no avail.

Playing the blame game achieves nothing. I am tired of profession bashers; it does not serve the Australian public to make broad attacks on all financial advisers. Instead, ASIC should be working “hand in glove” with the industry.

ASIC has been ineffective as a regulator in improving the standard of financial advice in this country. We have the model of world’s best practice, which has been built by the professional representative body – the FPA. Co-regulation with a body that has made the investment to achieve the standards required to protect to public interest is the only logical solution.

As I have highlighted previously, the reputation of the financial advice industry would be improved if the Federal Government drafted legislation which separated an independent financial adviser (IFA) from a financial product salesperson (FPS). This would go a long way to increasing the level of consumer trust in advisers’ that are truly working to help their clients achieve financial security.

My vision is for all Australians to have confidence that they will receive high-quality, professional, financial advice.

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.