Treasury has published a Consultation Paper “Lifting the professional, ethical and education standards in the financial services industry” in response to proposals by the Parliamentary Joint Committee on Corporations and Financial Services’ inquiry.
The paper discusses:
- how standards will be lifted and maintained at a specified minimum level;
- how minimum standards will be monitored and enforced; and
- mechanisms for the ongoing professionalisation of the industry.
The PJC model focusses on individuals providing financial advice on Tier 1 financial products. Tier 1 financial products include products such as life insurance, shares, superannuation and managed investment schemes. Tier 1 financial products can be contrasted to Tier 2 financial products which are generally simpler in nature. Tier 2 financial products include general insurance products, consumer credit insurance, and basic deposit products.
Under the PJC model, a financial adviser must be registered to provide financial advice.
To be registered, the financial adviser must:
• be a member of a Professional Standards Councils4 (PSC) approved professional association;
• be degree qualified;
• complete a professional year;
• pass a registration exam; and
• undertake ongoing professional development.
Under the PJC model ASIC would continue to set and enforce the minimum standards required for advice related to Tier 2 products.
