The Association of Financial Advisers (AFA) welcomed the passing of the Corporations Amendment (Professional Standards of Financial Advisers Bill 2016 (the Bill) through the Lower House on Tuesday night, with AFA CEO Brad Fox saying it helps pave the way towards greater recognition of financial advice as a profession, improved consumer perception of financial advice and more Australians seeking life-changing financial advice.
“We believe the legislation will propel financial advice forward in the minds of consumers and make strides towards achieving greater public recognition and ultimately take up of advice,” he said.
From 1 January 2019, new advisers must pass an exam, be degree-qualified and supervised during their professional year by a registered financial adviser. There are also new requirements for existing advisers.
Existing advisers must:
- Comply with a Code of Ethics (to be set by the future Professional Standards Body) from 1 January 2020???that could be facilitated through membership of a professional association such as the AFA
- Successfully complete an exam by 1 January 2021
- Attain degree equivalency by 1 January 2024
- Undertake ongoing professional development
“One of the first tasks will be to define what degree equivalency means, so that transition pathways for existing advises can be clarified,” Mr Fox said.
The AFA Professional Standards Working Group has begun work to ready the AFA to attain a registered compliance scheme to monitor and enforce the future Code of Ethics. Once the Professional Standards Body is established the AFA will consult on:
- The syllabus for bridging courses and bachelor degrees
- Sensible transition pathways such as the Fellow Chartered Financial Practitioner (FChFP) designation for existing advisers
- CPD requirements
- Exam content and structure
- Code Compliance Scheme requirements
- integration of TPB requirements
“The AFA is is committed to helping advisers transition to becoming recognized as members of a trusted profession,” Mr Fox said. “There is no doubt that these are challenging times, but they are also very exciting times, which is why the AFA has adopted our Adaptive Change focus.”
The Adaptive Change framework recognises that when the paradigms shift for an industry or market place, the businesses in that market must change in order to survive, and by collaborating they can progress faster to future success and growth.
“The AFA communities of practice and education pathways are designed to help all our members to build and test business models, value propositions, advice delivery and practice efficiency,” Mr Fox said.