The Federal Government acknowledged the passage of the Corporations Amendment (Professional Standards of Financial Advisers) Bill 2016 through the Senate on Thursday, while rebuffing calls for a Royal Commission into banks.
Minister for Revenue and Financial Services, Kelly O'Dwyer said the government was delivering on its financial sector reform agenda to improve consumer outcomes.
"A Royal Commission will not benefit consumers, will take years to complete and will cost the Australian taxpayers millions of dollars," she said.
"I'd like to thank all stakeholders who played a role in the development of these important reforms."
The financial services industry has broadly welcomed the passage of the Corporations Amendment (Professional Standards of Financial Advisers) Bill 2016, which passed through the Senate yesterday.
The Financial Services Council (FSC) called the bill a significant piece of reform, adding it would bring financial advice in line with other professions.
The reforms include compulsory education requirements for new and existing advisers, professional year requirements for new advisers, an exam, and obligations under a code of ethics for all advisers.
"Consumers will have confidence that those they entrust to provide them with advice meet high standards of initial and ongoing education and professional standards," the FSC said.
The Financial Planning Association (FPA) also welcomed the reforms, adding the FPA had released a white paper in 2014 with a 10-point plan to prepare the industry for higher education and professional standards.
Chief executive, Dante de Gori said: "This resulted in recommendations from the Parliamentary Joint Committee (PJC) Inquiry and the Financial System Inquiry (FSI) that have now been legislated".
FPA members also adhered to the FPA Code of Professional Practice and Code of Ethics, he said.
The Stockbrokers and Financial Advisers Association (SAFAA) CEO, Andrew Green said the new standards were vital to maintaining investor confidence and integrity in the system.
"For many years, we have advocated for reforms to raise education, training and ethical standards in the financial advisory industry," he said.
The Australian Financial Markets Association head of policy, Tracey Lyons said the reforms were a result of cooperation between various financial services industry bodies, licensees and the government, and would help ensure high standards of education and skill "are the norm across the industry".
The Australian Bankers' Association also welcomed the passage of the legislation, and added banks had already implemented measures to ensure financial advisers adhere to high professional standards.
"A new industry-wide hiring protocol is being implemented so banks can find out a lot more about a financial adviser's previous conduct history before employing them. This will better identify financial advisers who have not met the industry's minimum legal and ethical standards," he said.