The independent body to set higher professional standards for financial advisers, announced by the Government, will mean more competent financial advisers who meet higher standards of ethics and conduct, the financial services industry believes.
Commenting on Monday's announcement of the new legislation, the Australian Bankers' Association (ABA) said it was an important step to professionalise the financial advice industry.
ABA executive director for retail policy, Diane Tate, said: "Customers rightly expect to receive high quality financial advice to help them maximise their savings, build their wealth, plan for retirement or help manage their money in retirement".
"Banks are helping to fast-track the professionalisation of the financial advice industry by agreeing to fund the establishment costs of the new independent body. This will mean that the new professional standards framework can be introduced as soon as possible," she said.
Tate said the body had already introduced a new protocol for hiring financial advisers to know more about the adviser's conduct history, quality of advice, risk management, performance, and compliance record before employing them.
"The aim is to better identify financial advisers who have not met the industry's minimum legal, conduct and ethical standards, and help ensure Australians can trust they receive financial advice from professional, competent and ethical financial advisers at their bank," she said.
BT Financial Group's general manager for advice, Mark Spiers, said the new reforms would lift the culture across the advice industry and raise the bar for all financial advisers.
"In 2014 we set our own minimum standards for BT financial advisers for ongoing certification, ethics training, professional industry membership as well as education," he said.
"We are pleased to see the Government's announcement is consistent with our proposal and we look forward to a compulsory code of ethics and increased professional standards across the industry to help protect customers seeking financial advice."