There are a number of changes occurring in the world market at the moment which is affecting how the local market is being regulated. An example is the recent announcement that mortgage brokers will need to do the equivalent of the RG146/PS146 compliant course to undertake their role in the same way financial advisers have had to be RG146/PS146 compliant*.
Issues which have led to such a regulatory reaction are both local and global. Amongst the issues are the Merrill’s sale and the Lehman Brothers collapse. Who would have predicated that such iconic institutions would have succumbed in the way they have? It seemed that the global market had only recently come to terms with the cluster of collapses in the early 2000s (Enron, World Com, HIH ect.) and the regulation that followed (CLERP in Australia and Sarbanes Oxley in the US). Many commentators believe the full impact of sub-prime is still to be felt and that we are undergoing one of the biggest financial crises since the Great Depression. It is obvious that many counties in the world agree that this is an important event. The level of governmental contributions to markets and compromises to the free market is unparalleled. The extent of the impact will depend on how the central banks and governments stay ahead of the crisis. There has been a remarkable reaction by the governmental bodies including the EU rescue package, the bail-out and rescue package from the US government for AIG and the Australian governments guarantee on all deposits.
Whilst undoubtable many if not most mortgage brokers will see this change in regulation a threat, for others this will mean there is opportunities for mortgage brokers who get their qualifications early as the mortgage brokers who lag behind are likely to be the ones that will be left out of a job as the financial regulation merry go round continues on its path.
Financial advisers are also feeling the pressure to increase their qualifications. The Advanced Diploma of Financial Services (Financial Planning) which is a pathway to professional accreditation for instance CFP (Certified Financial Planning) is becoming popular especially with new entrances who are trying to compete with longer serving advisers. The Advanced Diploma of Financial Services (Financial Planning) typically has topics on Estate Planning, Financial Plan Construction, Advanced Investment principles and Taxation.
It can be clearly seen that the trend is towards greater regulation and hence qualification for professionals in the financial services industry. The more mature the industry the greater the requirement and market pressure to get a job. Many in the accounting industry find themselves competing with people with a Masters degree.
*RG146 is the ASIC Regulatory Guide which started as ASIC’s PS146 or Policy statement 146. Various institutions offer this course including PS146, The International Institute of Technology and Kaplan.
The ASIC components include:
Provide advice in superannuation
Provide advice in life insurance
Provide advice in financial planning
Provide advice in derivatives
Provide advice in insurance broking
Provide advice in managed investments
Provide advice in securities