The Government has released exposure draft Corporations Amendment (Professional Standards of Financial Advisers) Bill 2015 for consultation on education, training and ethical standards for financial advisers.
Under the proposed legislation:
- New financial advisers will require a degree, undertake a professional year and pass an exam.
- The Government will recognise an independent industry-established standard setting body, operational from 1 July 2016, that will develop and set education standards, professional year requirements, continuing professional development requirements and develop a comprehensive code of ethics for financial advisers.
- Existing advisers will be provided a transition process and will be required to complete an appropriate degree equivalent (or have a recognised transition pathway determined by the independent standard setting body) and pass an exam.
- All advisers both new and existing will be required to undertake continuing professional development (CPD) and be party to a code of ethics.
The new education and training requirement will be effective from 1 July 2017, with the code of ethics requirements coming into force from 1 July 2019.
The Bill will restrict the use of the titles ‘financial adviser’ and ‘financial planner’.
There will be an obligation on an Australian financial services licensee to ensure that its advisers comply with the new education standards, and are covered by a scheme. But there is no obligation on advisers to join a professional association.