Financial advisers have come under increasing scrutiny in recent years and the latest introduction of examinations that every financial adviser needs to write in order to remain a financial adviser has seen some extreme opposition by financial advisers.
The FSB ordered that financial advisers need to pass an examination that will equip them to advise consumers on the myriad of Investment products by testing their knowledge of these products and the regulations governing the financial services Industry. Where exactly is the problem, financial advisers should know these things anyway and the very fact that there is such vehement opposition to the two exams shows that perhaps those that we trust to give us good financial advice, don’t really know what they are talking about. The FSB is there to protect the interests of consumers and ensure that the industry conducts itself within the regulations laid down and the laws that govern this country, amongst many other things.
The financial advisers should just knuckle down and learn what they need to know in order to advise consumers properly. The very credibility of the industry is at stake here. Every profession from Doctors and lawyers to Real Estate agents has to write examinations and stay abreast of the latest changes in their industries in order to perform their functions properly. There is little doubt that the financial services industry has had a tough time in the last few years with the emergence of fraudulent schemes and behavior by financial advisers from pension fund surplus stripping and elaborate ponzi schemes to irregular property syndication schemes that have seen investors lose millions of Rands.
The accountability of financial advisers has been under scrutiny for some time with the companies and financial advisers having to repay investors or pay fines and even resulted in criminal convictions. These new regulations present an opportunity for the Financial advisers to clean up their industry and inform potential customers of the requirements, showing that they are accredited and qualified to advise. Those that embrace the regulations and pass the exams will be in a good position to grow their customer bases and improve the perception of the industry.