The Turnbull Government has announced reforms to ensure consumers receive professional treatment from financial advisers, and is supporting the Financial System Inquiry’s recommendation to improve the education, training and ethical standards of financial advisers.
Member for Corangamite Sarah Henderson said that the framework will require new financial advisers to hold a degree, pass an exam, undertake continuous professional development, subscribe to a code of ethics and undertake a professional year before they can advise clients.
“It is clear that reform is required,” said Ms Henderson.
“To build consumer confidence and trust, stakeholders including advisers and educational bodies will need to work together towards achieving higher standards.
“A new standards setting entity will be created by industry and recognised by the Government.
“The Turnbull Government also recognises the importance of appropriate transitional arrangements for existing advisers to ensure that their experience is recognised.
“While these reforms will represent a substantial change to the current regulatory environment, financial advisers will deliver significant benefits to consumers and industry by raising standards to help build a recognised profession.
“Further consultations will be undertaken as part of the legislative process,” Ms Henderson said.
The Government’s full response to the Financial System Inquiry is available at www.treasury.gov.au/fsi
28 October 2015
Note: Further details of the framework are below.
New Professional Standards Framework
The Government will recognise an independent industry-funded standard setting entity that will develop and set education standards, professional year requirements and continuing professional development requirements for existing and new financial advisers.
New financial advisers will be required to complete a degree (at Australian Qualification Framework (AQF) level 7), undertake a professional year and pass an exam.
Existing advisers will be provided a transition process and will be required to complete an appropriate AQF level 7 bridging course (or have a recognised transition pathway determined by the independent standard setting entity) 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 Government will protect the titles ‘financial adviser’ and ‘financial planner’.
The entity will be operational by 1 July 2016.
The new framework will be effective commencing 1 July 2017.