The Minister for Revenue and Financial Services Kelly O’Dwyer has introduced legislation into Parliament today, mandating professional standards for financial advisers.
According to a statement, the Corporations Amendment (Professional Standards of Financial Advisers) Bill 2016 includes compulsory education requirement 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 statement said.
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.
The government said it will also establish an independent standards body to administer the new regime.
From the date of establishment until the regime begins on 1 January 2019, the body will be responsible for developing and setting the industry exam, developing the code of ethics and setting the education requirement, including working with education providers to establish appropriate courses, the statement said.
The body will be funded, both initially and on an ongoing basis, by the industry.
“The current requirements have allowed some financial advisers to become qualified to provide financial advice to retail consumers after only four days of training,” Ms O’Dwyer said.
“There is also no specific requirement currently for advisers to undertake continuous professional development.
“The government’s reforms will significantly increase the education, training and ethical standards of financial adviser, who will need to be qualified to a standard equivalent to a degree.”
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