The Australian Securities and Investments Commission (ASIC) is proposing that all new and existing financial advisers pass a “financial services competency certification” examination.

Under a consultation paper released last week, ASIC suggests amending the assessment and professional development framework for advisers by requiring the exam for “entry stage” advisers, or those who provide tier one financial advice. 

Tier one excludes general insurance products, consumer credit insurance, basic deposit products and non-cash payment products.

The paper proposes that following “entry stage”, all new advisers would be supervised for at least a year full-time, or the equivalent part-time, by someone with at least five years’ experience in the industry.

In addition, all advisers would have to take a “knowledge update review” every three years on changes to laws, market issues and new products. Advisers would also have ongoing professional development requirements.

The consultation paper is part of ASIC’s response to the Parliamentary Joint Committee Inquiry into Financial Products and Services, also known as the Ripoll Inquiry, which was convened after the collapse of Storm Financial and Opes Prime.

ASIC Commissioner Greg Medcraft says a review of training standards has highlighted that change is required to increase consumer confidence in the financial advice industry, and to encourage professionalism.

“The proposed framework for assessment and professional development is designed to improve the quality of advice by ensuring that all financial advisers achieve a uniform minimum standard that is consistent with developments in the industry both here and overseas,” he said.

ASIC wants feedback on the consultation paper by June 1.