ASIC announces new financial adviser professional standards reforms

The Australian Securities and Investments Commission (ASIC) has announced changes to reporting dates for a number of required notifications in the transition to the new financial adviser professional standards reforms. 

The revised schedule is intended to simplify licensees’ disclosure obligations. ASIC is also clarifying the process for recognising advisers as ‘existing providers’. 

Existing Providers

Financial advisers who are listed on the Financial Advisers Register (FAR) between 1 January 2016 and 1 January 2019 will be recognised as an ‘existing provider’ under the new professional standards. 

Therefore, financial advisers who are currently authorised to provide personal advice to retail clients on more complex financial products should make sure they are on FAR. 

Without recognition as an ‘existing provider’ an adviser must pass an exam and complete an approved qualification by 1 January 2019 to work as a financial adviser. They must also undertake a year of work and training. 

If a person is an ‘existing provider’, they have until 1 January 2021 to pass the exam, and 1 January 2024 to complete an approved qualification. In the meantime, they can continue to work as a financial adviser. 

Financial advisers can demonstrate that they are an ‘existing provider’ if they are:

• ‘current’ on the Financial Advisers Register (FAR) at any time between 1 January 2016 and 1 January 2019; and
• not banned, suspended or disqualified as at 1 January 2019.

Changes to FAR notifications

ASIC will also make changes to the timing of the earliest notification requirements under the professional standards reforms.  These changes will simplify licensees’ notification obligations and enable ASIC to implement the required systems changes more effectively.

These changes do not affect advisers’ and licensees’ substantive obligations under the professional standards reforms. Advisers and licensees must still comply with the new substantive professionalism and education requirements and licensees must keep appropriate records for compliance purposes.

A key change is that ASIC will push back the timing for licensees to notify of new advisers who are joining the industry for the first time after 1 January 2019. As a result, new ‘provisional relevant providers’ can only be added to FAR from 15 November 2019.

Further information about the changes to notification dates can be found on ASIC’s Professional standards for financial advisers – reformswebsite.

Background

The Corporations Amendment (Professional Standards of Financial Advisers) Act 2017 commenced on 15 March 2017. It introduces a number of new requirements for advisers who provide personal advice to retail clients on more complex financial products.

For further information, please visit ASIC’s website: Professional standards for financial advisers – reforms. ASIC will update content on this website from time to time to provide further information about the reforms.