Minister for Revenue and Financial Services Kelly O’Dwyer introduced the Corporations Amendment (Professional Standards of Financial Advisers) Bill 2016 into Parliament in November 2016.
The bill passed the House of Representatives yesterday on the first sitting day of Parliament for 2017.
However, while passage of the bill was secured, shadow assistant treasurer Andrew Leigh proposed an amendment that calls on government to apologise for consumer failures in the financial advice sector.
“Whilst not declining to give the bill a second reading, the House notes that in recent years, numerous cases of inappropriate financial advice have had a negative impact on Australian consumers’ confidence in the financial services industry,” the amendment stated.
“[The House] notes that this lack of trust has become a barrier to consumers seeking financial advice … [The House] welcomes this continuation of the Future of Financial Advice reforms which were initiated under the former Labor government.
“[The House] calls on current Liberal and National Party parliamentarians to apologise for the disregard their colleagues in the 43rd parliament showed for the many victims of bad practice in the financial advice sector when they voted against Labor’s Future of Financial Advice measures.”
The amendment was defeated 75-68.
During a reading of the legislation, Ms O’Dwyer said the bill comes in response to a minority of rogue financial advisers.
“I recognise that the majority of advisers have provided and continue to provide appropriate and high quality advice to their clients,” she said.
“The measures debated today will help to rebuild confidence in the industry which has been compromised due to the actions of a minority of advisers.”
The education bill includes compulsory education requirements for both new and existing financial advisers, supervision requirements for new advisers as well as a code of ethics for the industry.
The bill will also mandate an exam that will represent a common benchmark across the industry and an ongoing professional development component.
The new professional standards regime will start on 1 January 2019, whereby new advisers entering the industry will be required to hold a relevant degree.
Existing financial advisers will have access to transitional arrangements allowing them two years, until 1 January 2021, to pass the exam, and five years, until 1 January 2024, to meet the education requirements.
Yes minimum education standards for politicians would also be a great idea. This is still no guarantee when you consider that genius Scott Morrison and his cohorts came up with the rehashed superannuation changes which are a complete joke. Seriously!
[quote=Abinash Dhungel]No, it will not. Any degree completed more than 10 years ago is irrelevant.[/quote]
And where exactly in the Bill did you get this info from ?
When I first read the “apology” headline, I thought it was going to be about apologising for ASIC’s failure to enforce the then current laws against Storm.
some homework on what’s a ”relevant” degree. Will the PHD in Finance & Tax Law I did in 1902 be relevant?
No, it will not. Any degree completed more than 10 years ago is irrelevant.
The answer to the original question is “don’t know” as it isn’t detailed in the legislation – personally I believe a PHD in Finance & Tax Law from 1902 is more relevant than a Bachelor in Exercise Science completed last year but I am sure if I had the Bachelor in Exercise Science I would be arguing otherwise. I’ll also let my Cardiologist client who spent 17 years training that after 10 years he needs to retire as his original degree is irrelevant at the same time.
That’s not correct Abinash, that time period (or any other) has not been specified.
we should be pushing for newly elected politicians to meet minimum criteria and education standards before being allowed to determine the fate of our nation and industries, this is the blind (Politicians) instructing the semi blind (regulators)
We should as a [b]minimum[/b][u][/u], require all politicians (including those aspiring to become one) to have run (one) or have worked in a small business employing < 5 people for at least 12 months.
It is all very well for the regulators, e.g., ASIC and FOS, to determine that advice is “inappropriate” but at no time in this debate are they required to put forward what is appropriate advice in the particular circumstance. Why?… because they haven’t got a clue..
Have you looked at the qualifications of those employed to determine what [b]is [/b][u][/u] and what is not appropriate? They have no idea themselves. What are they going to determine! They are being fed crap by product makers because our representative bodies have no time to make sufficient nor adequate representations on our behalf.
Too little too late. Another clueless politician listening to groups with self interest and tarnishing 98% of the good advisers out there.
Congratulations FPA, you have succeeded in ruining this industry for everyone by your greedy self interest.
Good luck selling you FP business ever to anyone. What a joke this industry has become.
Am I right in recalling that those currently CFP already meet the educational standards and will not need to gain further qualifications but will need to sit the exam?
To my understanding but hopefully that is amended to be real CFP’s only and nobody who was grandfathered.
My understanding is that the CFP does not qualify as a relevant degree standard qualification however this remains uncertain accordingly to my licensee.
A real CFP does qualify in theory, because a relevant degree is a prerequisite to enrol in the CFP program. A grandfathered CFP does not, because the FPA was handing them out like cereal box trinkets in the late 90s to people with very little education.
However the FPA goes out of its way to prevent anyone determining who has a real CFP and who was grandfathered, so having a CFP designation is largely worthless from an education substantiation perspective. It is also the reason why all CFPs will have to sit the new exam, as the FPA won’t allow ASIC or anyone else to easily distinguish those 75% of real CFPs who have already completed a far more comprehensive exam.
Is the exam for all advisers across the industry (including existing advisers), or for just the advisers who haven’t met the degree requirement? Thanks
For all I believe
Other than the apology bit, which is useless politicing, this is good law. I welcome its introduction.
yes it is politicizing, but one would have to suggest that recent failures at CBA and their FP’s, and the current government’s whiplash with a toothbrush against the perpetrators is the main issue, and a potential RC into the entire sector is still strongly desired in many quarters.
If only politicians had to meet similar standards.
Hear hear!!
Most pollies are lawyers, besides a few gems like Lambie, etc