Banking industry supports financial advice industry professionalisation
(8 May 2015 – Australia) The Federal Government’s push to professionalise the financial advice industry has been given the thumbs up from the Australian Bankers’ Association (ABA).
ABA chief executive Steven Münchenberg said high quality financial advice was vital in helping Australians secure their financial futures.
“When consumers seek financial advice, they rightly expect it to be in their best interests.
“They also expect their financial adviser to be skilled and competent, and be required to meet high standards of ethical behaviour and professional conduct,” Münchenberg said.
“The Government’s proposed reforms build on the significant changes that have resulted from the Future of Financial Advice reforms and continue to drive the process of the professionalisation of the financial advice industry.”
The banking industry is today announcing its support for the main elements of the Parliamentary Joint Committee’s recommendations and the Government’s proposals contained in its consultation paper, Lifting the professional, ethical and education standards in the financial services industry.
These proposals include: a new minimum entry qualification for a financial adviser, being a degree or degree equivalent.
There will be a new mandatory exam, to be passed before a financial adviser can be registered on the ASIC financial adviser register.
A new professional year requirement for new financial advisers, similar to other professions.
An enhanced annual continuing professional development (CPD) program, including mandatory ethics and responsible decision-making learning.
A new mandatory requirement to be a member of a recognised professional association and adhere to their Code of Conduct.
Münchenberg said: "The banking industry supports a co-regulatory model and an independent standards setting body to set and monitor the higher education and professional standards for financial advisers across the financial advice industry.
“To help drive professionalisation, and working with the Government, the major banks are willing to contribute funding to support the establishment and initial operating expenses of the new independent body.
“This will allow the financial advice industry and Government to move quickly on the design and implementation of new industry-wide standards as proposed by the Government in its consultation paper.
“The ABA will continue to work constructively with the Government and other stakeholders on implementing a new model. Banks support delivering additional reforms which build on the Future of Financial Advice platform of improved consumer protections, raising education and competency standards of financial advisers, and driving the professionalisation of the financial advice industry,” said Münchenberg.