O’Dwyer commits to transitional deal for planners
The Assistant Treasurer, Kelly O'Dwyer, has made specific reference to "appropriate transitional arrangements" being put in place for financial planners impacted by the Government's legislative reforms aimed at raising education, training and ethical standards in the financial planning industry.
At the same time as releasing the exposure draft legislation for the changes, O'Dwyer acknowledged the scale of the changes which would impact planners and gave the assurance regarding transitional arrangements.
"While these reforms will represent a substantial change to the current regulatory environment for financial advisers', significant benefits to consumers and industry will be delivered," she said. "The Government recognises the importance of appropriate transitional arrangements to ensure that the skills and experience of existing financial advisers is acknowledged."
According to the formal announcement issued by O'Dwyer, under the proposed legislation:
- New financial advisers will require a degree, undertake a professional year and pass an exam;
- The Government will recognise an independent industry-established standard setting body, operational from 1 July 2016 that will set education standards, professional year and continuing professional development requirements, as well as develop a comprehensive code of ethics for financial advisers;
- Existing advisers will be provided a transition process and will be required to complete an appropriate degree equivalent (or have a recognised transition pathway determined by the independent standard setting body), and pass an exam;
- All advisers both new and existing will be required to undertake continuing professional development (CPD) and be party to a code of ethics;
- The new education and training requirements will be effective from 1 July 2017, with the code of ethics requirements coming into force from 1 July 2019.
The explanatory memorandum attaching to the exposure draft legislation makes it clear who will and will not be viewed as a financial adviser by providing examples such as:
"Persons who are not relevant providers:
Dylan provides personal advice to wholesale clients on relevant financial products. He is not authorised to give advice to retail clients.
Effie is authorised to provide general advice to retail clients. She is not permitted to give personal advice which takes into account the client's objectives, financial situation or needs.
George works in a bank. He is only permitted to give advice on basic banking products.
Dylan, Effie and George are not relevant providers and they do not need to comply with the new standards."
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