In a recent speech the Minister for Revenue and Financial Services gave an update on the Government’s plans to legislate financial adviser professional standards.
As Australia’s population ages, we want people to seek advice from those with expertise and experience.
And the best way to do this is by raising the professional standards of advisers, as was recommended in numerous recent inquiries, including the Financial System Inquiry and the inquiry of the Parliamentary Joint Committee on Corporations and Financial Services…..
The Government will establish a standard setting body, as a Commonwealth company limited guarantee, to develop professional and educational requirements for new and existing advisers, including an exam and a code of ethics.
All new advisers will be required to complete a relevant degree, pass an exam and complete a professional year from 1 January 2019.
Existing advisers will have a five-year transitional period to reach degree equivalent status — a status that can be achieved through a number of flexible pathways.
This transition period reflects our awareness that existing advisers will need to balance the further education requirements with the full-time demands of continuing to provide high-quality financial advice to their clients.
Existing advisers will have from 1 January 2019 to 1 January 2021 to pass the exam, unless exempt. At this stage, it is envisaged that the standards body will have the power to exempt some advisers on a case-by-case basis. However, this exemption from the exam will be reserved for advisers who are exceptionally qualified, and who have many years of experience in addition.
Further, all advisers will be required to undertake continuing professional development from 1 January 2019, and will need to comply with a Code of Ethics. The Code of Ethics will be developed by the standards body. Individual advisers will also need to nominate and subscribe to their preferred compliance scheme, which will monitor the adviser’s compliance with the Code of Ethics.
Finally, the Government will enhance the Financial Adviser Register, to provide a mechanism for accountability and transparency, which will assist consumers to make informed decisions about choosing a financial adviser….
There are still some technical details that we need to settle. We will keep working with industry and consumers to make sure we get these reforms right.