The Australian and New Zealand Institute of Insurance and Finance (ANZIIF) is opposing the proposal of a national examination scheme for all insurance brokers and life insurance advisers.

In its submission to the Australian Securities and Investments Commission’s (ASIC) CP153 paper on licensing financial advisers, ANZIIF argues all advisers, regardless of whether they are providing general or personal advice, should sit examinations on their speciality with registered training organisations.

ASIC has proposed these exams should be national to ensure the broker or adviser meets the requisite competency levels to provide advice.

“ANZIIF argues against a national exam being a solution to the problem of ensuring that all financial advisers providing personal or general advice to clients have the necessary ethical standards and minimum competence,” it said.

“Any measure of competency should be segregated by modules and the licensee and adviser should be able to choose which modules are required to be undertaken.

“Quality education and exams at the education provider level with audit to weed out substandard providers is the key.”

ANZIIF also opposes national exams as it believes the cost of establishing and administering them will be considerable and will have marginal benefits for the consumer.

“The cost of implementing and maintaining such a regime and imposing the structure and rules outlined in CP153 will be significant for government, ASIC and for the industry, while the returns in terms of better adviser behaviour will be marginal,” it said.

“The ultimate target beneficiary, the consumer, will undoubtedly suffer higher costs for financial advice and perhaps a limited availability of advice.”

But the Australian Institute of Superannuation Trustees (AIST) has come out in support of a national exam.

“We acknowledge that this may be costly for existing financial advisers and licensees financially and time-wise, and that this could potentially lead to higher prices for consumers,” it said in its submission.

“There is no indication [in the paper] for advisers and licensees about the ramifications if an adviser was to fail the exam.”  

The AIST argues a national exam for new entrants into the financial services industry would be good as it would raise standards.

“Incorporating an exam as part of the current training regime will minimise costs and also allow for a skills assessment to be included,” it said.

“Therefore, as a minimum a national exam should be mandatory for new entrants.”

ANZIIF argues the minimum level of education for an adviser should be the Diploma of Financial Planning, which covers theoretical, practical and ethical subjects.