Standards

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Assistant Minister for Financial Services Jane Hume announced that financial advisers will be given up to an extra two years to upgrade their professional standards and qualifications.
The Morrison government concession means that currently operating financial planners will have until January 2022 to pass a financial advice exam and until January 2026 to graduate from a financial advice university or TAFE degree accredited by Financial Adviser Standards and Ethics Authority, she said.
Labor shadow minister for financial services Stephen Jones slammed the delay, he said "the government are being negligent and dragging their feet on urgent reform." 
Some financial adviser lobbyists were grateful for the changes but said they didn't go far enough.
In particular, the executive director of the Association of Independently Owned Financial Professionals, Peter Johnston said the government should give further leeway to advisers specialising in life insurance and income protection.
"Risk insurance advisers should not need a four-year degree. They should need a 12-month refresher diploma in risk insurance because they're only dealing in that area," he stated.
 
Senator Hume said the financial advice exam was available only in capital cities and would not be available in regional areas until September 2019.
"The extension of the exam will ensure that all advisers, including rural and regional advisers, will have two years to sit the exam, as originally intended," she said.
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Financial advisers given extra two years to upgrade their professional qualifications

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<img src="https://counter.theconversation.edu.au/content/67151/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The large banks and AMP will be required to fund the establishment of a new independent body to oversee the professional standing of the much-criticised financial services industry, the government has announced.
The chairman and directors of the body, a Commonwealth company, will be appointed by the government, which will develop an ongoing industry funding model for it.
But the new professional standards regime for the industry will not start until 2019 and will take until 2024 to be fully operational.
The latest moves to boost the industry’s professional standards have been announced by the Minister for Financial Services and Revenue Kelly O'Dwyer ahead of an Australian Securities and Investments Commission (ASIC) report that further documents malpractice by the banks and AMP. The Australian Financial Review reports that it reveals they “have been shortchanging tens of thousands of customers tens of millions of dollars by charging them for services they didn’t receive”.
O'Dwyer foreshadowed action on professional standards in April but it fell by the wayside with the election. Given Labor’s urging of a royal commission into the banks, which has community support, the pressure on the government to respond has intensified.
O'Dwyer said legislation would be introduced into parliament this year to mandate professional standards for advisers.
They will include compulsory educational requirements for both new and existing advisers; supervision requirements for new advisers; a code of ethics for the industry; an exam that will be a common benchmark across the industry; and ongoing professional development.
The new standards regime will not commence until January 1 2019, and existing advisers will have until January 2021 to pass the new exam and until January 1 2024 to reach degree-equivalent status.
The standards body will develop and set the industry exam as well as the ethics code and determine the education and development requirements for both new and existing advisers.
Professional associations and other independent third party monitoring bodies will develop compliance schemes to monitor and enforce advisers’ adherence to the code. These compliance schemes will be approved by ASIC.
Michelle Grattan is professorial fellow, University of Canberra, and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/michelle-grattan-20316" target="_blank">here</a>.
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