On Friday, following extended debate and consultation, Assistant Treasurer The Hon. Kelly O’Dwyer introduced draft legislation into Parliament for the further reform of professional standards for financial planners.

We hope that this will finally put some realistic barriers to entry to the profession and provide the community with some measurable standard, paving the way for confidence and trust in the financial advice they receive from financial planners.

In summary:
• The term financial planner/adviser will be enshrined in law.
• New financial advisers will require a degree, undertake a professional year and pass an exam.
• An independent standards setting body will be established from 1 July 2016 to set education standards, the professional year framework and continuing professional development requirements, as well as developing a comprehensive code of ethics for financial advisers.
• All advisers, both new and existing, will be required to undertake continuing professional development (CPD), be subject to a code of ethics and pass an exam. Existing advisors will be provided with a transition process.
• The new education and training requirements will be effective from 1 July 2017, with the code of ethics requirements coming into effect from 1 July 2019.

There is some devil in the detail however, and I suspect there will be further debate on these initiatives. For example, the responsibility for the development of a suitable and enforced Code of Ethics must be actively administered by an independent body. In our opinion, that naturally is the role of a professional association like the financial Planning Association of Australia (FPA) which has had these structures in place for over two decades. However, the government has chosen not to enshrine compulsory membership of a professional body similar to other professions.

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Source: Hewison Private Wealth

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