New rules and training aim to cut dodgy financial planner advice
New legislation designed to raise professional standards of tainted industry.
From 2019 Australian financial planners and advisers will adhere to a new set of reforms, centred around a code of ethics, designed to raise minimum standards within the industry.
The legislation, announced earlier this year, will be introduced to parliament before year's end and will be applicable from 1 January 2019.
These reforms will directly affect the 22,500 financial advisers currently listed on the Australian Securities & Investments Commission's (ASIC) Financial Adviser Register.
Minister for Revenue and Financial Services Kelly O’Dwyer says the new professional standards will usher in compulsory educational requirements for both new and existing financial advisers and establish an industry code of ethics, governed by an independent standards body.
The chairman and directors of this regulatory council will be appointed by the Minister, while some of Australia's largest banks and AMP will provide initial funding.
Steps will be taken by the government to develop and maintain an ongoing industry funding model.
The code of ethics will be devised by the independent standards body and enforced through ASIC-approved compliance schemes setup by professional associations and other third party organisations.
As part of the new academic requirements, advisers will be required to pass a benchmark exam and fulfill ongoing professional development practices. Existing advisers will have until 1 January 2021 to pass the new exam and until 1 January 2024 to reach degree-equivalent status.
There'll also be supervision requirements imposed upon new advisers.
The government plans to introduce the legislative reforms package following final consultations with industry and consumer groups later this month. A series of scandals has led to criticism of the industry and significant compensation payouts.
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