ASIC today announced the next phase of its consultation with the financial advice industry about its proposal to implement a national examination for financial advisers.

ASIC will soon hold discussions with industry participants about the potential for setting up a self-regulatory organisation (SRO) which would develop and administer the exam.

‘It is important that the national exam is driven by, and developed with, industry,’ ASIC Chairman Greg Medcraft said.

‘Continuing our consultative approach to improving the quality of advice provided to retail investors is a priority.’

ASIC believes a self-regulatory model, when implemented effectively, can be an efficient approach to establishing the exam. Further, it gives industry members the opportunity to jointly take responsibility for shaping their profession. It also demonstrates industry’s support and commitment to providing effective accreditation for financial advisers.

ASIC would have a close relationship with the SRO because of its overall responsibility for standards in the retail advice sector. ASIC would assist the SRO by contributing the research it has recently commissioned on competencies. ASIC could also provide support by acting as a formal observer in the SRO and through regulatory guidance.

ASIC is proposing a 2014 start date for the exam with a two-year transition period.

‘Financial investors and consumers need to be confident and informed when planning for their future and having a national exam for financial advisers is an important part of making this happen,’ Mr Medcraft said.

ASIC would like to see the completion of the national exam as a requirement of membership of an industry association or a condition of employment for industry participants.

Background

In April 2011 ASIC issued Consultation Paper 153 Licensing and Assessment & Professional Development for Financial Advisers (CP 153) in which it sought feedback on proposals regarding an assessment and professional development framework for financial advisers, which included a national exam (refer: 11-75MR). Feedback to CP 153 has been largely supportive.

As per CP 153, ASIC indicated it will conduct cognitive task analysis research to identify the relevant skills and knowledge to be assessed in the adviser certification exam. This research is due to be completed by third quarter of 2012.