The SMSF Association has welcomed the passage of improved standards for financial advisors through the Parliament.
The Corporations Amendment (Professional Standards of Financial Advisers) Bill 2016 has passed both houses of Parliament. The Bill aims to improve the education and ethical standards of financial advisors.
From 1 January 2019 new financial advisors will be required to hold a relevant degree before starting a year of supervision and sit an exam. Existing financial advisors will have two years – until 1 January 2021 – to pass the exam and until 1 January 2024 to reach a standard equivalent to a degree.
SMSF Association CEO Andrea Slattery said: “On the eve of our National Conference, we could not have wished for better news.”
“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.”
“Higher educational standards are essential to nurture a respected financial advice profession and give consumers confidence in the advice they are receiving.”
Slattery said the Government was to be commended for adopting a co-regulatory approach, which give the industry a “high degree of responsibility” to improve professionalism in the sector.
“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.”
Slattery also welcomed the transitional timeframes, though issued a warning to financial advice professionals.
“While we welcome the generous transitional timeframes, I remind advice professionals that they should not be complacent and remember that it is there professional duty to their clients to keep improving their knowledge and skills.”