Stockbrokers reject adviser practicing certificate proposal
A Financial Services Council (FSC) Green Paper proposal for financial advisers to be required to obtain a practicing certificate has been rejected by the Stockbrokers and Investment Advisers Association (SIAA).
Responding the Green Paper, the SIAA noted that it had previously rejected an earlier FSC proposal around individual adviser licensing.
The response noted that the Green Paper had proposed that the government and industry “embark on a consultation around the feasibility of a practicing certificate model that would require advisers to obtain a practicing certificate confirming their compliance with registration, CPD and ethical standards”.
The SIAA response said the organisation did not support the practicing certificate. Model and did not consider it would benefit the financial advic3 industry.
Referring to its 2021 rejection of the individual licensing model, the SIAA said it did not believe it was appropriate for the stockbroking and investment advice industry.
“Feedback from our Principal Members with large numbers of advisers pointed out that it was not logistically sensible for registration obligation to be devolved to individual advisers,” it said.
“Licensees undertake active oversight of their advisers to ensure they are fulfilling their obligations in relation to the fit and proper declaration and education and CPD obligations.
“The process of checks that attends adviser registration by licensees are an important aspect of securing PI insurance, as insurance firms need to confirm that licensees have active oversight of their advisers.
“We highlighted our concerns that obtaining PI insurance would become even more difficult if the licensee could not provide evidence to the insurer of its active oversight of adviser registration,” the SIAA response said.
“Our reasons for not supporting the introduction of a practicing certificate are the same as those that underpin our opposition to individual adviser registration. We also consider that imposing another step in registering an adviser will add to a licensee’s regulatory burden and costs without any benefit to the adviser or the licensee,” it said.
And people wonder why advisers are leaving the industry (or just getting out of providing any form of personal advice and going to a general advice model)
The sooner we are delinked from stockbrokers the better