A new education, training and ethical standards regime for financial advisers will commence from 1 January 2019 under the Corporations Amendment (Professional Standards of Financial Advisers) Act 2017.
WHO IS AFFECTED
The reforms will capture all financial advisers who provide personal advice to retail clients on relevant financial products. Relevant financial products include all financial products other than:
- basic banking products
- general insurance products
- consumer credit insurance
- a combination of any of these products.
All Australian Financial Services (AFS) Licensees, their representatives and limited AFS licensees and their representatives will be required to comply.
The Financial Adviser Standards and Ethics Authority (FASEA) has been declared as the standards body responsible for setting the education, training and ethical standards for financial advisers.
THE NEW REQUIREMENTS
To become a financial adviser from 1 January 2019, an individual must:
- complete a Bachelor Degree (or higher) approved by FASEA
- complete a professional year (PY) of supervised experience
- complete an exam.
This means that RG 146 diploma level studies will not be recognised towards becoming a financial adviser from 1 January 2019. If you are considering becoming a financial adviser, email email@example.com for further guidance.
Existing financial advisers will also need to complete the exam by 1 January 2021 and meet the new education standards by 1 January 2024.
FASEA will also be responsible for setting a Code of Ethics.
From 1 January 2020, all financial advisers must comply with the Code of Ethics. This will be monitored and enforced by ASIC approved compliance schemes.
FASEA will also be responsible for:
- determining the CPD obligations
- setting the supervision and requirements for the PY
- selecting an appropriate common term for new financial advisers completing their PY
- approving foreign qualifications.