Big banks support ethics classes, university degrees for scandal-hit financial planning industry

Australia’s biggest banks have announced support for a huge overhaul of the scandal-hit financial planning sector, including mandatory university degrees, exams and ethics classes.

Major issues have been exposed in the planning arms of banks including Commonwealth Bank, Macquarie Bank and NAB.

The Australian Bankers’ Association (ABA) represents the big four, along with about 20 other institutions.

In a submission to the Federal Government, the ABA supports tough new standards for advisors on products such as life insurance, shares and superannuation.

“The submission that we’ve lodged on behalf of the banks absolutely backs what the Government’s trying to do,” the association’s chief executive Steven Münchenberg said.

“We want to see financial advice professionalised and [see implemented] the changes that are being proposed to increase the education requirements [and] the professional standards that financial advisors need,” Mr Münchenberg said.

The proposed rules would see university degrees become a minimum qualification for advisors, along with a professional training year and mandatory exam before planners can be registered.

The ABA’s submission to the Government is also backing mandatory annual “ethics and responsible decision-making” classes as part of a professional development program.

It also said planners should have to be members of a professional association and abide by a code of conduct.

“This is all a major step forward in professionalising financial advice and addressing some of the issues that are only all too familiar from the last few years,” Mr Münchenberg said.

“We want people to trust financial advice, so making it into a proper profession is the way we’re going to do that.”

Planners can currently practice with a few months’ study and a diploma.

The Government is considering its next move after two inquiries into the standards and professionalism of the financial planning industry, including a Parliamentary Joint Committee led by Liberal Senator David Fawcett.

http://www.abc.net.au/news/2015-05-07/big-banks-back-extra-education-for-financial-planners/6453936?WT.mc_id=newsmail