The possibility of the industry setting up a self-regulatory organisation (SRO), which would develop and administer the exam, is among the subjects it is hoping to discuss with the industry, ASIC said in a statement.
Greg Medcraft, chairman of ASIC, said the organisation believed it was important that the proposed national exam “is driven by, and developed with, industry”.
“Continuing our consultative approach to improving the quality of advice provided to retail investors is a priority,” he added.
ASIC is proposing a 2014 start date for the exam, with a two-year transition period.
The ASIC’s announcement on its plans to consult the advisory industry on setting up an SRO comes as the US financial services industry is also looking at an SRO, as part of that country’s effort to boost advisory standards. As reported, the US Securities & Exchange Commission has recommended an SRO as “one option for Congress to consider, as it looks for ways to help the agency monitor the [advisory] industry”, a statement on the House of Representatives’ website said in April, in unveiling new legislation known as the Investment Adviser Oversight Act of 2012.
In May, a coalition of US financial advisory groups argued that the costs of creating and maintaining an SRO had been underestimated by US authorities.
SROs ‘efficient’
For its part, ASIC said it believed that a self-regulatory model, when implemented effectively, would be an efficient means of establishing an exam intended for industry participants. In addition it said, the SRO model “gives industry members the opportunity to jointly take responsibility for shaping their profession”.
“It also demonstrates industry’s support and commitment to providing effective accreditation for financial advisers,” it said in the statement, which may be viewed on the ASIC website by clicking here.
Like most major jurisdictions, Australia has been seeking to tighten up the way financial advice is given to consumers in the wake of the global financial crisis. In March, the country’s parliament passed a bill known as the Future of Financial Advice Act, widely seen as the mirror of Britain’s Retail Distribution Review, which bans commissions on the sale of investment products as well as on “conflicted remuneration’.
