Financial advisers and planners should be subjected to new education and registration standards the Senate Economics References Committee has recommended in its report released today.
Under new education standards recommended by the Committee in its report on the Performance of the Australian Securities and Investments Commission (ASIC) , advisers and planners would be required to have a "relevant university degree" and three years' experience over five years.
The report also recommended that advisers should be unable to give advice before passing a national exam and they should be listed in a national register of those permitted to give Tier 1 advice. The Committee also called for the introduction of mandatory reference checking procedures for advisors and planners.
It also stated the terms ‘financial planner' and ‘financial adviser' should be protected and advisers and planners should be members of a professional association according to recommendations from a senate committee which has also called for higher minimum education standards.
Recommendations from the Senate Economics References Committee Report into the Performance of the Australian Securities and Investments Commission
Adviser Education
Recommendation 42 – The committee recommends that financial advisers and planners be required to:
- Successfully pass a national examination developed and conducted by relevant industry associations before being able to give personal advice on Tier 1 products;
- Hold minimum education standards of a relevant university degree, and three years' experience over a five year period;
- Meet minimum continuing professional development requirements.
Adviser Registration
Recommendation 43 – The committee recommends that a requirement for mandatory reference checking procedures in the financial advice/planning industry be introduced.
Recommendation 44 – The committee recommends that a register of employee representatives providing personal advice on Tier 1 products be established.
Enshrinement of terms
Recommendation 45 – The committee recommends that the Corporations Act 2001 be amended to require:
- That a person must not use the terms ‘financial adviser', ‘financial planner' or terms of like import, in relation to a financial services business or a financial service, unless the person is able under the licence regime to provide personal financial advice on designated financial products;
- Financial advisers and financial planners to adhere to professional obligations by requiring financial advisers and financial planners to be members of a regulator prescribed professional association.
Money Management’s coverage of the Senate Committee report into the performance of ASIC:
Senate Committee recommends royal commission
Bushby issues dissenting report
CBA refutes senator's deflection claims
ASIC should face regular reviews
Senate report calls for adviser banning powers and increased penalties
Expect ASIC to be more rigorous
