The Association of Financial Advisers (AFA) has outlined its recommendations to Treasury on draft legislation and regulations to help facilitate standards in the Australian advice profession.
In its submission titled ‘Revised Professional Standards Framework for Financial Advisers’, the AFA recommendations include fair Board level representation including a small business advice practitioner, flexibility around examining advisers, mandatory membership of a professional association and a common sense approach to the supervision of new adviser.
The AFA has also called for urgency around the future passage of legislation and establishment of the Standards Body.
“To deliver clarity on the requirements and education pathways for advisers, it is imperative the Standards Body be established sooner rather than later,” says AFA Policy and Professionalism General Manager Samantha Clarke.
“This significant development for the Australian advice profession should be given every reason for success, and we believe urgency as well as a common sense approach to professional standards is paramount.”
The AFA’s recommendations to Treasury include:
- • At least one director of the Standards Body should have experience managing or advising in a small financial advice practice.
- • Further, the remaining industry directors should have financial advice experience or be involved in a financial advice practice.
- • The Standards Body should have the discretion and flexibility to adapt the standards to the different specialisations, experience, skills and background of advisers, and consult before making and reviewing standards.
- • Further clarification should be given around the role quality advisers can play in teaching their craft to the next generation of advisers.
- • Membership of professional associations should be mandated, as their role includes upholding the highest standards of behaviour, improving, monitoring and enforcing standards
- • Code compliance monitoring to require timely and transparent communication between all stakeholders.
“Our recommendations have been made following extensive communication with our members as well as what is in the best interests of consumers,” says Clarke. “We look forward to the ongoing dialogue with Government, Treasury and other professional associations to help shape this historic development for the profession.”
