The SMSF Association has endorsed new legislation aimed at raising the educational and ethical standards of financial advisers.
“We have long advocated the lifting of educational and professional standards in the financial advice sector as a critical step to ensuring the consumer has access to the best financial advice,” SMSF Association chief executive Andrea Slattery said.
“Higher educational standards are essential to nurture a respected financial advice profession and give consumers confidence in the advice they are receiving.”
The Corporations Amendment (Professional Standards of Financial Advisers) Bill 2016, which received royal assent last week, will impose new education and ethical standards on financial advisers from 1 January 2019.
The new laws mean financial advisers will have to hold a relevant degree before they will be allowed to embark on the supervision year and sit the required exam. Under the legislation, existing advisers will have until 1 January 2021 to pass the exam and until 1 January 2024 to achieve a degree-equivalent standard.
Slattery approved of the time frame given to advisers to comply with the framework, but also offered a warning to practitioners.
“While we welcome the generous transitional time frames, I remind advice professionals that they should not be complacent and remember that it is their professional duty to their clients to keep improving their knowledge and skills,” she said.
The association also applauded the co-regulatory methodology the government applied to the new regime, under which the industry will play a significant role in raising the professional standards of advisers.
“The establishment of a statutory standard-setting body to govern the professional standing of the financial advice sector is an excellent step and our association looks forward to working closely with it,” Slattery said.
“A key priority will be to ensure that the new education standards recognise the importance of specialist advice areas, such as SMSF advice, which is critically important as about 1.1 million Australians have $636 billion in retirement savings invested through the SMSF sector.”
