The Shadow Minister for Small Business and Financial Services, Senator Katy Gallagher, says legislation setting higher education, professional and ethical standards for financial planners is still expected to be introduced to the parliament before the end of the 2016 sitting year.
Parliament rises on December 1, and does not sit again until February next year. The government has previously indicated that legislation mandating higher standards will be introduced before the end of the year.
Key among the reforms is the establishment of an independent standards body that will oversee the establishment of minimum education requirements for both new and existing financial planners; establish an industry-wide code of ethics to be monitored by a range of ASIC-approved bodies; set and administer the industry-wide exam for all financial planners; and establish continuing professional development (CPD) requirements.
The standards body has a tight timetable, with education standards for new entrants to financial planning due to come into effect on January 1, 2019. Education standards for existing planners will come into effect on January 1, 2024.
Speaking at a Financial Services Council/BT Political Series breakfast in Sydney on Friday, Gallagher said the reforms are welcome, but have been a long time coming.
“It was back in September 2014 that the FSC called for an independent body to have control of the education and professional standards for financial advisers, declaring that self-regulation is no longer a credible option for establishing higher standards,” Gallagher said.
“The FSC at the time urged the industry to redefine itself, through robust oversight and high competency standards, to rebuild the trust and confidence of consumers so more Australians seek financial advice.
“These reforms to professional standards for financial advisers have been a long time coming and the government has announced they will be in the parliament this year, and we certainly await their introduction.”
Gallagher said reforms to professional standards for financial planners are just one element of a range of legislative reforms that are designed to ensure the financial services sector delivers better results for consumers and restores the public’s trust and confidence in the sector.
“We do welcome the steps that the FSC has taken towards improving trust in consumer outcomes in the financial sector,” she said.
“I note that the FSC through Sally and her team were one of the first groups to knock down my door to come in and tell me about all the work they are doing. It’s work that I welcome, because ensuring that the sector delivers for consumers is certainly a focus that I will bring to his portfolio.”
