Adding exams would give Murray report extra marks

ANZ welcomes recommendations from David Murray’s year-long review into the financial services industry to lift education, training and competency standards for financial advisers.

ANZ believes the next step should be the implementation of a national exam for financial advisers, according to ANZ CEO of Global Wealth Joyce Phillips.

"ANZ fully supports the fact education standards for financial planners need to be increased."
Joyce Phillips, ANZ CEO of Global Wealth

  • There is an urgent need to build community confidence in the standard of advice


  • The requirement for an examination will accelerate the competency development many advisers will undertake


  • This action will further strengthen the quality of advice delivered


  • More Australians will willingly seek advice as a consequence

“Our overarching view is a higher level of accreditation (education) is absolutely required and ANZ fully supports the fact education standards for financial planners need to be increased,” she says.  

“ANZ supports the Australian Securities and Investment Commission’s proposal for a national competency exam for financial advisers as part of its proposed industry self-regulatory organisation.”

“We believe the Series 7 exam run by Financial Industry Regulatory Authority (FINRA) in the US is a good model that could form the basis of a well-developed and well-run exam in Australia.”

The Series 7 exam covers areas such as assessing a customer’s risk tolerance, suitability of products, disclosure and ethical standards. By all accounts the Series 7 is commonly described in the US as 'no walk in the park'.

FINRA also has an enforcement role and in 2013 brought 1,535 disciplinary actions against registered brokers and firms in the US and referred 660 fraud and insider trading cases to the authorities.

“We need a stringent exam like that that really tests the knowledge and skills of our financial advisers and puts the interests of investors first,” Phillips says.

ANZ has offered to contribute $600,000 to the start-up costs of the organisation with the costs recouped by ANZ based on fees charged to financial advisers who sit the exam.

The report released this week recommends financial advisers providing personal advice should meet extra-education standards in specific areas such as superannuation and undertake ongoing training.

It says the government should prioritise a review of minimum standards, with many stakeholders supporting education requirements to a degree level. But Phillips says that may take years and a national exam that adequately tested the competency of advisers was also a better solution.

“Requiring an exam for all financial advisers, will go a long way to helping lift the level of confidence people have in the industry and it would encourage more people to seek advice,” she says.

“Under current laws, financial advisers can be fully certified to provide both general and private advice by obtaining a diploma of financial planning. An annual exam will help create a more robust training framework for advice.”

ANZ supports the installation of an industry framework for training and professional development as outlined by the Financial Services Council.

The level of professionalism in the financial planning industry has been an issue for consumers for some time and we need to rebuild the level of trust people have with planners, Phillips says.

“We need to get moving on this and I will start taking steps with my peers.” she says. “There are models working in other markets we can learn from and I think now is the right time for the industry to get on with it.”

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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