The Australian Securities and Investments Commission (ASIC) has called for a national exam to improve the training and competence of financial advisers.

“Under a national examination model, advisers would need to successfully pass the examination before being able to give personal advice on Tier 1 products,” the regulator says in a submission to a Senate inquiry into its performance.

“In addition to an entry examination, advisers should complete regular knowledge updates to ensure they maintain their competency once they have passed the examination.”

ASIC concedes a national exam will require amendments to the Corporations Act section on financial services licensees’ obligations.

But it says the move would deliver consistent competency standards and ensure advisers are adequately trained.

It would also allow mutual recognition of qualifications in the US, UK, Canada, Singapore and Hong Kong, which have national exam models, “potentially allowing Australian advisers to advise clients in those countries”.

ASIC’s submission also addresses the problem of “bad apples” moving unchecked around the financial services industry.

It proposes mandated reference checking on all employees giving personal advice on Tier 1 products.

It also wants licensees to provide “honest and full feedback when asked to provide a reference”.

Licensees should keep accurate and comprehensive employment records, ASIC says.