“As part of the professionalisation of financial advice, the education requirements and competencies expected of advisers would be set and governed by advisers’ professional associations who would be held responsible for the task, as opposed to a government regulator,” the submission from SPAA said.

“In turn, ASIC, as the relevant regulator of financial advice, would approve professional associations to be the arbiter of setting education and competency standards for their given profession,” it said.

“For instance, SPAA, being a specialist SMSF organisation would set SMSF advice education requirements and competencies if approved by ASIC to do so. This would embody a system of co-regulation."

SPAA went on to explain that ASIC’s current approach, setting a minimum standard of education, “has not been successful” in ensuring advisers meet the requirements to “provide high quality financial advice”.

“RG 146 is not a flawed concept by itself as it simply outlines the minimum requirements expected by ASIC as a guide to advisers, licensees and education providers,” the submission from SPAA said.

“However, too often the industry (licensees and educators) have interpreted the minimum requirements to be all that is required to be regarded as competent,” it said.

“For instance, parts of the industry have interpreted the wording around Tier 1 advice in RG 146 to mean that once the basic competencies for Tier 1 producers are met, an adviser is an expert in advising on the specific products for which they have met."