In November 2016, the Corporations Amendment (Professional Standards of Financial Advisers) Bill 2016 was introduced to parliament by the Hon Kelly O’Dwyer MP.
Previously, the Australian Securities and Investments Commission (ASIC) set guidelines outlining the minimum knowledge, skills and education standards for financial advisers. Many key organisations, including the Financial System Inquiry and the Parliamentary Joint Committee, had raised concerns that the existing guidance may not impose appropriate professional standards for the financial advice sector.
Minister O’Dwyer introduced the bill to impose higher professional standards. She noted:
“The current requirements have allowed some financial advisers to become qualified to provide financial advice to retail consumers after only four days of training. There is also no specific requirement currently for advisers to undertake continuous professional development.”
The Consumer Credit Legal Service (WA) Inc. made submissions to the Parliamentary Joint Committee in 2014 urging reforms similar to those that have now been introduced.
Under the Bill, a new professional standards regime is to commence on 1 January 2019, and will include:
- compulsory education requirements for both new and existing financial advisers;
- supervision requirements for new advisers;
- a code of ethics for the industry;
- an exam that will represent a common benchmark across the industry; and
- an ongoing professional development component.
CCLSWA welcomes increased education, training and ethical standards of financial advisers as the reforms will ultimately protect consumers by ensuring they have access to high quality, professional financial advice.
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If you have been effected by the conduct of a broker, you can call CCLSWA’s telephone advice line on (08) 9221 7066.