The Association of Financial Advisers (AFA) welcomes the Government’s release today of Exposure Draft Legislation for the new Life Insurance Framework (LIF) and the release of draft legislation on Professional Standards for Financial Advisers.

On the LIF exposure draft, AFA CEO Brad Fox said the AFA will begin a review of the legislation and its implications for advisers and their clients over the coming days.

On the professional standards draft legislation, Mr Fox said the AFA supports great advice for more Australians and welcomes the rising professionalism of the financial advice industry. “Legislation on professional standards will go a long way towards lifting consumer perceptions of the financial advice profession,” he said. “The draft legislation is promoting progress towards achieving greater public recognition of the emerging profession of financial advice.”

However, the AFA expressed concern that the draft legislation will only be open for public consultation until 4 January 2016.

“We are concerned about the timeframe in which the Government is seeking valuable feedback from the AFA and other key stakeholders and will express this concern to Government,” Mr Fox said.

The AFA has summarized some of the important features of the draft legislation for its members. These include:

1. Continuing professional development (CPD) – All advisers will be required to undertake CPD and subscribe to a Code of Ethics. Subject to transitional arrangements, 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
2. Degree equivalent education for existing advisers – Existing advisers 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. Transitional arrangements will apply and the AFA expects that appropriate designation pathways such as the AFA’s Fellow Chartered Financial Practitioner (FChFP) qualification will be included. The Government has noted the importance of appropriate transitional arrangements, to ensure that the skills and experience of existing financial advisers is acknowledged.
3. Degree requirement for new advisers – Advisers entering the profession will require a degree, undertake a professional year and pass an exam.

The AFA has provided its members with the opportunity to offer comments to assist with providing input into the industry working groups helping to prepare for the Independent Standard Setting Council. The AFA has also provided its members with a timeline to highlight upcoming key dates.

Source: Association of Financial Advisers

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