The National Insurance Brokers Association (NIBA) has welcomed proposed upgrades to financial product advisers’ education requirements, but it has again expressed concern that regulators do not properly understand the role of brokers.

In a response to an Australian Securities and Investments Commission consultation paper, NIBA qualifies its “overall” support for proposed changes to Regulatory Guide 146 (RG146) with an entreaty to “recognise that the advice and assistance provided by insurance brokers is different to that provided by financial planners, investment advisers and other advisers in the financial services sector”.

It says any change to the regulatory guide on education should “operate to improve outcomes for customers of insurance brokers, and… not merely add undue complexity or expense to the operation of the brokers’ business”. 

“The feedback from NIBA’s members… and our own experience as a training body working with RG146 is that greater structural modification is required in this regulatory guide,” the submission says.

NIBA says product knowledge should be classified in a way that avoids duplication of topics found in both the generic and specialist listings, with a clearer distinction between product-related knowledge and advice skills.

“The focus… should be [on] product knowledge that is factual and can be readily stated for each speciality. It is an essential subset of the knowledge a person needs to provide information or general or personal advice.”

NIBA says it is important to understand the components of advice, and to distinguish these components from “products”.

“Financial planning and insurance broking have many specialist knowledge components but they are not products. Rather, they are advisory processes that involve a specific set of skills oriented towards providing personal advice.

“For example, a broker may provide a risk management recommendation rather than an insurance product solution for a client.”