Consumer trust isn’t something to be taken for granted, but reports from the UK, US and here at home are all pointing towards an uplift in trust levels around financial advice, which can only be a welcome development.
There are significant tailwinds behind the financial advice industry at the moment, but some major obstacles are still preventing advice practices from taking advantage of surging demand according to a new study from CFS.
FAAA pulls up ABS on advice occupation classification, proposes new definition
The Financial Advice Association of Australia has highlighted several errors in the Australian Bureau of Statistics’ proposed update to its classification of occupations, and put forward its own proposal for a new category describing the role of a modern financial adviser.
The Australian and New Zealand Standard Classification of Occupations (ANZSCO) is put out by the ABS and is relied upon by a diverse range of stakeholders for the “collection, publication and analysis” of occupation statistics.
As part of the ABS’ latest review of the ANZSCO, however, several issues were flagged by the FAAA. The most glaring was that in the definition of both categories that relate to the advice role, the skill level listed includes an errant reference to “…at least five years of relevant experience”.
“This is incorrect as it does not reflect s921B of the Corporations Act,” the FAAA points out, while asking for the reference to be removed.
Moreover, the FAAA adds, the role of a financial adviser is not given clearly or correctly, and is conflated with other professions. Currently, the ‘group’ for financial advisers and investment managers includes the titles Financial Investment Adviser (alternative title Financial Planning Adviser) and Financial Investment Manager (alternative title Portfolio Manager).
“These occupation names, titles and association skills included in the current ANZSCO, do not reflect provisions in the Corporations Act or current roles and practices in the financial services industry,” the FAAA writes in its submission to the ANZSCO consultation. “This classification mixes up unrelated roles across the different parts of the financial services industry.”
The current classification incorrectly combines the role of a financial adviser and an investment adviser, the FAAA continues, and marks the title of ‘manager’ as more senior than an adviser. The first error is a breach of law, the FAAA warns, as only qualified financial advisers can legally provide financial advice, while the second is misleading because a ‘manager’ takes on more of an operations role in the context of a financial advice practice.
Ultimately, the association says, advisers should have a singular unit group dedicated to the profession.
“The change… will result in a structure that more accurately differentiates the occupation of financial adviser to reflect the skill and education requirements placed on these professionals by the Corporations Act, and the tasks they perform.
“This will result in more accurate data to inform industry, the education sector, government, business and existing and potential financial advisers on critical matters including skills shortage, migration, workforce participation and movement, and the demand for education.”
