Both Industry Super Australia (ISA) and the Australian Institute of Superannuation Trustees (AIST) have recommended modifications to a proposed model on lifting educational, professional and ethical standards in the financial services industry.
In their joint submission to a Parliamentary Joint Committee on the issue, both ISA and AIST believe work on increasing education standards should be separated from the development of industry codes of conduct.
The submission also suggests "a tripartite model for the composition of the Financial Planning Education Council (FPEC) that includes a more appropriate balance of consumer, academic and industry representatives."
Both superannuation representative groups say the potential of ASIC's Financial Advisers Register can be harnessed "as a vehicle to ensure compliance with higher standards."
"The financial planning industry will not be able to achieve its ambition of being regarded a profession, while advisers can be paid conflicted remuneration," the submission states.
"While the FoFA reforms introduced a ban on sales commissions, conflicted remuneration continues to be widespread as a result of extensive grandfathering as well as generous exemptions to the life insurance advice industry. If the government is serious about ensuring that consumers can access professional and unconflicted financial advice, it should consider a complete ban on all types of conflicted remuneration."
The bodies do not support five of the 14 recommendations and have suggested modifications to another four. They estimate FPEC will need $4 million per year in funding for its first phase of work to delivering higher educational standards.
"This would pay for a part-time independent chair, a director and four-to-eight policy staff, depending on background and level of experience, and set up costs for the exam, although over time, ongoing delivery of the exam could be structured in a way that was fully self-funded. Consideration would need to be given as to whether the council representatives would need to be salaried positions," the submission said.
Both ISA and AIST believe FPEC should also be subject to an independent review after its first phase of work "to ensure that it is adequately resourced and performing its role to a satisfactory standard."
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, Australian Institute
, Industry Super Australia
, Superannuation Trustees
, Financial Advisers Register
, Financial Planning Education Council
, Parliamentary Joint Committee