The government has released draft legislation for the proposed higher adviser standards, which states prior learning for existing advisers will be measured by the types of courses advisers have completed, not the number of years of experience they have.
According to the draft bill unveiled yesterday, by 1 July 2019, existing advisers must either have a degree or have completed one or more courses that give the advisers "qualifications equivalent to the standard".
The courses will be determined by an independent, industry-established body, set to begin operating from 1 July 2016. The body will also develop a code of ethics for advisers and new CPD requirements.
Further, it will approve the exam that all advisers will need to pass by 2019.
The draft does not say that advisers' number of years of experience will be considered into the transition pathway, which was recommended by the Parliamentary Joint Committee on Corporations and Financial Services.
Meanwhile, new advisers will be required to hold a degree, undertake a professional year and pass an exam. The education and training requirements will be effective from 1 July 2017, with the code of ethics requirements to be enforced by 1 July 2019.
In a statement, Assistant Treasurer Kelly O'Dwyer said, "These reforms, recently announced in the government's response to the Financial System Inquiry, have widespread support across industry participants, professional bodies and consumer representatives of the need to raise standards for financial advisers in order to improve public confidence and trust in the sector."
"The government recognises the importance of appropriate transitional arrangements to ensure that the skills and experience of existing financial advisers is acknowledged."
The draft bill also outlines the obligation for licensees to notify ASIC of any breaches – or alleged breaches – of the new code of ethics.
Further, it states that a person is illegally using the terms "financial adviser" and "financial planner" if he or she carries on a financial services business or provides a financial service and is not authorised as a licensee or on behalf of a licensee.
In a seperate announcement, Ms O'Dwyer said the government has also released the draft legislation for the life insurance sector which she reiterated will "ensure that the interests of financial firms and consumers are better aligned".
According to the AFA, the draft legislation will only be open for public consultation until 4 January 2016.
"We are concerned about the timeframe in which the government is seeking valuable feedback from the AFA and other key stakeholders and will express this concern to the government," said AFA chief executive Brad Fox.
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