A “strong consensus” is building on key aspects of recommendations put forward by a Parliamentary Joint Committee inquiry to raise the level of professional, ethical and education standards in financial planning, according to the Assistant Treasurer Josh Frydenberg.
Frydenberg said the government is close to finalising its approach to the PJC recommendations, but recognises that transition arrangements will be important to the effective implementation.
“That is why before legislation is introduced, further consultation will be undertaken to settle key remaining implementation, timing and transition issues,” he said.
“These reforms will represent a substantial change to the current regulatory environment for financial advisers, will deliver significant benefits to consumers, and assist in maintaining trust and confidence in the financial system. It is therefore important to get them right.”
In a video address to the inaugural Workplace Super Specialists Australia conference in Sydney yesterday, Frydenberg said the government had received more that 50 submissions in response to its consultation paper of the PJC recommendations.
“The submissions showed that there is near unanimous agreement that reform is required to maintain public confidence in the financial services industry, and that new – higher – standards are needed,” Frydenberg said.
He said the elements of the PJC recommendations attracting strongest consensus include:
• Establishing an industry-funded Independent Council to set and monitor education, competence and training standards;
• Lifting the minimum qualification standard for new advisers, to an Australian Qualification Framework (AQF) level seven (Bachelor) degree, or equivalent;
• Introducing a “professional year” for new advisers;
• Requiring all advisers to undertake higher standards of continuous professional development;
• The need for an exam;
• Requiring advisers to subscribe to a code of ethics; and
• Developing transitional arrangements for existing advisers.
“The Government is committed to lifting professional, ethical and education standards in the financial advice sector,” Frydenberg said.
“Our focus is now on the bipartisan recommendations from the Parliamentary Joint Committee on Corporations and Financial Services (PJC), chaired by my colleague Senator David Fawcett.
“We are close to finalising our approach in this area and remain focused on achieving a broad consensus, and bipartisan support in the Parliament.”
