3 December 2015
Media Release - #2015033, 2015

Raising professional standards of financial advisers

The Turnbull Government has today released exposure draft legislation to give effect to reforms to raise education, training and ethical standards for financial advisers, Minister for Small Business and Assistant Treasurer, the Hon Kelly O'Dwyer MP 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,” Minister O’Dwyer said.

Under the proposed legislation:

  • New financial advisers will require a degree, undertake a professional year and pass an exam.
  • The Government will recognise an independent industry-established standard setting body, operational from 1 July 2016 that will set education standards, professional year and continuing professional development requirements, as well as develop a comprehensive code of ethics for financial advisers.
  • Existing advisers will be provided a transition process and will be required to complete an appropriate degree equivalent (or have a recognised transition pathway determined by the independent standard setting body), and pass an exam.
  • All advisers both new and existing will be required to undertake continuing professional development (CPD) and be party to a code of ethics.
  • The new education and training requirements will be effective from 1 July 2017, with the code of ethics requirements coming into force from 1 July 2019.

“While these reforms will represent a substantial change to the current regulatory environment for financial advisers’, significant benefits to consumers and industry will be delivered,” Minister O’Dwyer said.

“The Government recognises the importance of appropriate transitional arrangements to ensure that the skills and experience of existing financial advisers is acknowledged.

Stakeholders are invited to comment on the exposure draft legislation and explanatory material by lodging a submission online via the Treasury website. Submissions close on 4th January 2016. Legislation is expected to be considered by Parliament in early 2016, prior to the establishment of the new standard setting body by 1 July 2016.