The financial advice sector in Australia has yet to reach the point that it may be considered a profession, despite containing some professionals within it, according to Australian Securities and Investments Commission (ASIC) Deputy Chair, Peter Kell.
Kell, speaking on the first day of the second round of hearings at the Banking Royal Commission, made the statement in response to a question from Senior Counsel Assisting the Commissioner, Rowena Orr, QC regarding the status of the financial advice industry.
“In ASICs view, it is not yet a profession. There are certainly professionals within the industry, but we do not view the industry as a whole as having reached what would normally be regarded as the standards of a profession at this point in time,” Kell said.
He added that it was the objective of ASIC and most advisers that the sector became a profession which had in turn lead to the introduction of proposed education and professional standards for adviser.
…we do not view the industry as a whole as having reached what would normally be regarded as the standards of a profession…
Questioned as to why the advice sector had yet to reach the standards of a profession, Kell attributed this to past practices around remuneration and education standards but also for a failure for the advice sector to be well represented.
“We would say that the standards around competency and the qualifications that you have to have to be a participant in the financial advice sector, the ways in which advisers have been remunerated in many cases, and the conflicts of interest that remuneration has generated between advisers and licensees and the clients, and…some of the conduct and consumer outcomes that have been very poor on a widespread scale, indicate that we’re not yet at a position where we have a profession,” Kell said.
“I would also note that we don’t have in this sector a single, dominant professional association. There are some associations which have taken a more forward looking approach to standards, but we certainly don’t have a professional association of the sort that you get in other sectors such as medicine,” he added.
The statements came at the start of Kell’s appearance at the hearing and were preceded by a few brief comments about the development of the advice sector and its current size.