From 1 January 2019, new professional standards requirements for financial advisers will progressively commence. Background.

The professional standards reforms were introduced in March 2017 to raise the education, training and ethical standards of financial advisers providing personal advice to retail clients on more complex financial products.

New entrants to the industry from 1 January 2019 will need to meet the new professional standards requirements. They must pass an exam and complete an approved qualification by 1 January 2019 to work as a financial adviser. They must also undertake a year of work and training.

UPDATE 24 December 2018: On 23 December 2018 the Financial Adviser Standards and Ethics Authority Ltd, the standards body for Part 7.6 of the Corporations Act 2001, made the Corporations (Relevant Providers Degrees, Qualifications and Courses Standard) Determination 2018 which approves a number of bachelor and higher degrees, and equivalent qualifications, for the purposes of the first education and training standard that relevant providers must meet under subparagraph 921B(2)(a) of the Corporations Act 2001.

Regulatory Guide 146 Licensing: Training of financial product advisers (RG 146) will continue to apply to financial advisers who are authorised by their Australian financial services (AFS) licensee as an ‘existing provider’ until the new requirements apply to them. Generally, existing providers are those who have a status of ‘current’ on the Financial Advisers Register (FAR), and not prohibited from providing advice on 1 January 2019.

If a person is an ‘existing provider’, they have until 1 January 2021 to pass the exam, and 1 January 2024 to complete an approved qualification. In the meantime, they can continue to work as a financial adviser.

RG 146 will also continue to apply to advisers who are not ‘relevant providers’ – that is, those who only provide general advice, those who provide advice about Tier 2 or less complex financial products and those who only give advice in relation to a time-sharing scheme.