The passing of the Corporations Amendment (Professional Standards of Financial Advisers Bill 2016) through the House of Representatives on Tuesday night, will aid in improved consumer perception and recognition of financial advice as a profession, according to the Association of Financial Advisers (AFA).
In a reading of the bill, Minister for Revenue and Financial Services, Kelly O’Dwyer said repeated examples of inappropriate advice have eroded consumer trust in the financial advice industry, which acted as a hurdle to consumers seeking financial advice.
“I recognise that the majority of financial advisers have provided and continue to provide appropriate and high-quality advice to their clients,” O’Dwyer said.
“The measures debated today will help to rebuild confidence in the industry, which has been compromised due to the actions of a minority of advisers.”
However the bill did not pass before Shadow Assistant Treasurer Dr Andrew Leigh proposed an amendment, urging current Liberal and National Party members to apologise to victims of poor financial advice for voting against the Labor Party’s Future of Financial Advice (FOFA) measures.
The amendment was defeated 75-68.
AFA chief executive, Brad Fox said: “We believe the legislation will propel financial advice forward in the minds of consumers and make strides towards achieving greater public recognition and ultimately take up of advice”.
Existing advisers must comply with a Code of Ethics from 1 January 2020 to be set by the future Professional Standards Body, complete an exam by 1 January 2021 and attain a degree or equivalent by 1 January 2024.
“One of the first tasks will be to define what degree equivalency means so that transition pathways for existing advisers can be clarified,” Fox said.
The AFA Professional Standards Working Group has commenced work to prepare the AFA to obtain a registered compliance scheme to monitor and enforce the future Code of Ethics.
Once the Professional Standards Body is set up, the AFA would examine the syllabus for bridging courses and bachelor degrees, transition pathways for existing advisers, Code Compliance Scheme requirements and integration of Tax Practitioners Board requirements.
