The Minister for Revenue and Financial Services, Kelly O’Dwyer, has reinforced the Government’s pursuit of higher educational and professional standards for financial advisers alongside changing remuneration structures in life insurance as part of a policy to restore consumer confidence.
The minister also acknowledged the role played by the so-called Industry Consensus Group made up of the Financial Services Council (FSC), the Association of Financial Advisers (AFA), the Financial Planning Association (FPA), the SMSF Association, Industry Super Australia (ISA) and consumer group, Choice.
Addressing an Australian Bankers Association (ABA), O’Dwyer stressed the importance of lifting education, training and ethical standards for financial advisers.
“The Turnbull Government believes that by raising the professional standards of financial advisers, we will improve consumer trust and confidence in the financial services sector,” she said. “…. It’s only by improving trust in the industry that consumers will confidently seek advice.”
“That’s why these reforms will require financial advisers to hold a degree or equivalent higher qualification, undertake a professional year, pass an exam, undertake continuing professional development, and comply with a code of ethics,” the minister said.
“We’ll establish a standards body to develop the education and training requirements for new and existing advisers.”
“And we’ll also make enhancements to the Government’s Financial Adviser Register, such as ensuring financial advisers display their principal place of business, whether they’re undertaking a professional year, which compliance scheme they subscribe to, and whether any breaches of the Code or sanctions have been imposed.”
O’Dwyer claimed such enhancements would provide a mechanism for accountability and transparency, and would help consumers make informed decisions when choosing their financial adviser.
“So not only do reforms of this kind improve the quality of advice and rebuild consumer trust, they also help industry take important steps to professionalise, whilst minimising the compliance burden for the industry,” she said.
