The Commonwealth Bank (CBA) has confirmed that it will provide funding to cover costs involved with the tougher adviser education standards announced last week.
As revealed by Financial Standard, CBA decided to raise adviser standards in the wake of the final report of the Senate Economics Committee inquiry looking into the performance of the Australian Securities and Investments Commission's (ASIC).
A CBA spokesperson told Financial Standard that "CBA will support existing advisers transition to the new requirements by providing funding for the advanced diploma in financial planning."
The bank also plans to fund employed planners' membership to a relevant industry association.
However, at the time of publishing CBA would not confirm whether if it will totally or partially fund the new requirements.
As part of the changes, existing CBA financial planners and their supervisors will be required to hold either an advanced diploma in financial planning (or equivalent) or a degree in finance, business, commerce or a related field by 30 June 2017.
All advisers will need to belong to an industry association by June 30, 2015, and existing senior financial planners will be required to obtain the Certified Financial Planner certification with the Financial Planning Association (FPA).
Starting from Friday last week, all new CBA advisers, direct supervisors or managers must hold a degree in finance, business, commerce or a related field.
CBA head of advice Marianne Perkovic told Financial Standard that the scandals and cases of bad advice within the banks advice businesses triggered a transformation in business structure and remuneration systems.
"The business that we read in the press is not the business that we have today," Perkovic argued.
"We are tied to get a culture that focused on quality advice; we had to recruit new people into the business and there were a lot of changes in people, both new advisers and managers," she added.
Perkovic said that the bank is currently "rewarding people for what is right."
"We've aligned the planners to the advisers and everyone has a risk gate opener, which is about quality and compliance," she said, and added: "if there's any issues with quality of advice or compliance, that will act to immediately stopping any remuneration of incentive arrangements."Author: Laura MillanSource: Financial Standard