With general advice set to remain in play under the Quality of Advice Review (QAR), albeit in a more restricted form, and non-relevant providers likely to be able to give ‘simple’ advice, The Advisers Association (TAA) believes now is the time to set a higher education bar for those delivering these forms of advice. 

“The current minimum requirement for people giving general advice is RG146,” said TAA CEO, Neil Macdonald. “RG146 was an accreditation for its time. Following QAR, we will move into a new era for financial advice, an era of growing consumer needs and greater consumer expectations. To meet these needs and expectations, we believe RG146 should be upgraded with AQF7 or AQF8 level assessed topics.”

The QAR proposals also indicate that individual non-relevant providers will be left to decide what training and education is required for their employees to give simple, ‘good advice’.

“We think this would likely result in inconsistent outcomes for consumers, as people won’t know what they don’t know,” Mr Macdonald said. “We therefore think providers across the industry could agree on a common requirement, such as an upgraded RG146, for people giving ‘general advice’, and for the staff of ‘non-relevant providers’ providing ‘good advice’. This would result in minimum consistent standards being applied across the industry, which should have the flow-on effect of improving consumer confidence.” 

TAA also suggests that when upgraded, the RG146 accreditation, if it is still a regulatory guide, be renumbered to avoid any previous negative connotations.

“Only a few years ago, some product providers were saying that RG146 qualifications were inadequate, and less onerous than those required to be a hairdresser,” Mr Macdonald said. “They now have the opportunity to call for change.”  

Requiring an upgraded common standard would give trustees more confidence that their employees were appropriately trained and competent. “Importantly, it would also increase consumer protection, as consumers would be more likely to consistently receive good advice and be better serviced than they currently are,” he said.

“However, we say all this with a fair degree of caution. What we want to avoid is a situation where consumers think they are receiving personal financial advice when, in fact, they are only receiving product advice and general information.”

Common standards would also establish a better understanding of the requirements for providing advice; and recognised qualifications. “Additionally, it has the benefit of creating a wider pool of people who can, if they want to, progress their studies to become fully qualified financial advisers,” he said. 

TAA also believes it could be a good way to bring new advisers into a practice and supervise them while they learn on the job, similar to the ‘associate doctor’ program being run in NSW Hospitals to help alleviate the current shortage of doctors in the health system.

“A healthy industry and advice profession needs to get more people into it and build a pipeline of people progressing to becoming fully qualified advisers,” he said.