The Financial Services Institute of Australasia (FINSIA) has said the implementation of an annual certification process to provide a statement of professional standing is key to improving standards of professionalism in the financial services industry.
The recommendation is one of three proposals in the financial services body’s submission in response to the royal commission.
FINSIA has also recommended the establishment of professional standards of conduct and competence for the industry, and the required completion of professional qualifications at defined roles and levels of seniority.
“The establishment of a rigorous annual certification process is the best and simplest approach to achieving an effective self-regulated framework to improve industry professionalism focusing on raising standards of individual competency and conduct,” FINSIA chief executive Chris Whitehead said today.
“Annual certification for every practising individual needs to be supported by an industry-wide monitoring process, overseen by an independent standards body, and backed by regulation where required.”
Core to implementing the annual certification process is ensuring professional membership bodies, an appointed independent standards body, such as the Professional Banking Council recommended in FINSIA’s submission, and regulators all work together to monitor standards and certify all individuals, Whitehead said.
He said any professional standards and annual certification process established by the industry must go meaningfully beyond regulatory minimums and be supported by organisational culture and strong disciplinary processes.
“Ultimately, support for professional aspiration and a professional culture will be far more successful than prescriptive regulation and a compliance mindset,” he said.
“A regulatory-driven approach runs the risk of encouraging organisational behaviour designed to meet basic regulatory compliance requirements rather than increased overall professionalism and better outcomes for customers.
“FINSIA understands that the execution of these recommendations requires the support and commitment from the many diverse institutions across the industry to be genuine industry-led reform supported by the right regulation, which is preferable and more effective to regulation on its own.”
FINSIA’s proposed annual certification process comprises an individual confirming they have completed the required annual professional development hours, confirming they are qualified to perform the role they are currently employed in, and confirming via independent audit that they, as a practitioner or adviser, have no investigations open or pending against them, or any current sanctions against them.
Meeting these requirements would result in the confirmation and issue of an individual’s statement of professional standing for the next 12 months, it said.
