Advisers will face higher education standards in the future as the Federal Government looks at what is happening overseas, according to Association of Financial Advisers (AFA) CEO Richard Klipin.

“Our regulators talk with their overseas counterparts and they are looking at what is happening there,” Mr Klipin told insuranceNEWS.com.au.

“The Federal Government is looking at higher standards for new entrants and higher obligations for ongoing education for advisers.”

Mr Klipin says overseas regulators are looking at topics such as annual competency exams for existing advisers and he doesn’t rule out something similar happening here.

“While entry standards can be raised, there are questions about what to do with existing practitioners who have been in the industry for 20 or 30 years and might not have any qualifications,” he said.

“We are advising existing advisers to undertake their own education to keep on the front foot for whatever the Government might bring in.”

Mr Klipin says the Government is formulating education standards for the advice industry, but it’s all being done behind closed doors at present.

Meanwhile, the Future of Financial Advice reform debate remains focused on fees, which the AFA still believes should be something settled between advisers and their clients and not by governments.

“If the advice complies with full disclosure, it is up to the client how they pay,” he said.

The AFA is also opposing the abolition of volume payments to advisers and dealer groups.

Mr Klipin says if dealer groups take the business risk of setting up networks of advisers, they should be rewarded.

If this income stream is banned, either product providers will find an alternative way of rewarding the group or prices to clients will have to rise to cover this loss of income.

“Alternatively we will see independent groups being forced to sell out to the institutions as they no longer want to carry the risks,” he said.

The AFA is continuing discussion with the Government on the reforms.

“We still have a seat at the table and will continue the debate on the reforms,” he said.