Great news !
New legislation to raise the standards of financial advisers
On 9 February 2017 the Minister for Revenue and Financial Services, Hon Kelly O’Dwyer MP, passed the Corporations Amendment (Professional Standards of Financial Advisers) Bill 2016 through the Senate.
The Bill is expected to receive Royal Assent on 24 February 2017 and come into effect on 15 March 2017.
What are the reforms and why are they required?
The reforms establish a commonwealth standards body that will set the professional, educational and ethical standards of financial advisers, including:
- 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.
The Government anticipates that the new standards body will be established by mid-2017.
Chartered Accountants have always operated within a highly qualified and professional framework.
These reforms will now help to professionalise the entire financial advice industry, and build greater trust and confidence in financial advice, by providing a benchmark standard and greater accountability and transparency for all financial advisers.
We look forward to working on the implementation of the reforms with the new standards body.
When will the reforms commence?
The reforms commence on 1 January 2019.
From this date all new advisers will be required to hold a relevant degree before they are eligible to commence the supervision year and to sit the exam.
Existing advisers will have a further two years, until 1 January 2021, to pass the exam and a further five years, until 1 January 2024, to reach a standard equivalent to a degree. This transition period recognises that existing advisers may need to complete the education requirements on a part-time basis while continuing to service their existing clients.
The new code of ethics will commence on 1 January 2020. All advisers will be required to adhere to the code from that day forward.
How will we support members?
We will work closely with members to support you through the transition period by:
- providing further information and regular updates relating to the practical implementation of the reforms once the details are advised by the new standards body, which is still yet to be established
- advocating on your behalf with the new standards body for appropriate recognition of Chartered Accountants’ existing qualifications, skills, experience and professional standards, and
- offering education, training and professional development to help you prepare for the new requirements.