The Australian Government has announced it will introduce legislation into the Parliament this year to mandate professional standards for financial advisers.
The Minister for Revenue and Financial Services, Kelly O’Dwyer, announced the new proposals earlier today. However some have commented that the time for the introduction of the new professional standards is unduly long.
The new regime will commence on 1 January 2019. Existing advisers will have until 1 January 2021 to pass the new exam and until 1 January 2024 to reach degree-equivalent status.
Banks to Pay
The cost of establishing the new body, as a Commonwealth company, is to be covered by the large banks, namely, ANZ Banking Group, Bendigo and Adelaide Bank, Commonwealth Bank, Macquarie Group, National Australia Bank, Suncorp Group, and Westpac and investment house AMP.
Commonwealth Bank were quick to support the new legislation, saying that they fully support the creation of a new professional standards framework that sets minimum qualifications for new and existing advisers, supervision requirements for new advisers, develops an industry exam and establishes a model code of ethics.
ABA Welcomes New Body
The Australian Bankers’ Association (ABA) welcomed the Federal Government’s announcement that it will introduce new legislation into Parliament this year to create a new independent body to set higher professional standards for financial advisers.
«This is an important step in the professionalisation of the financial advice industry,» Diane Tate, ABA Executive Director, Retail Policy, said
Among key reforms for the industry are:
- 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.
