The Parliamentary Joint Committee on Corporations and Financial Services has released its report on its Inquiry into proposals to lift the professional, ethical and education standards in the financial services industry.
The Inquiry focussed on:
- clarifying who can provide financial advice by protecting the title and function;
- improving the qualifications and competence of financial advisers;
- enhancing professional standards and ethics; and
- recommending transitional arrangements.
Its recommendations include that:
- the term ‘general advice’ in the Corporations Act 2001 be replaced with the term ‘product sales information’ to better reflect the nature of that information.
- the term ‘personal advice’ in the Corporations Act 2001 be replaced with ‘financial advice’ to better reflect the nature of that advice.
- to provide ‘financial advice’ an individual must be registered as a financial adviser.
- the government should bring forward legislation to protect the titles ‘financial adviser’ and ‘financial planner’ and require that to be eligible to use the title ‘financial adviser’, an individual must be registered as a financial adviser.
- the register of financial advisers only list financial advisers on the register when a professional association (which has been approved by the Professional Standards Councils) advises that the adviser has completed the requirements of the Finance Professionals’ Education Council approved professional year and passed the registration exam.
- the mandatory minimum educational standard for financial advisers should be increased to a degree qualification at Australian Qualification Framework level seven and a Finance Professionals’ Education Council should set the core and sector specific requirements for Australian Qualifications Framework level seven courses.
Its recommendations will most likely be considered by the Government when it is considering its response to the Financial System Inquiry Report.
