When you picture Australia, you likely think of rolling hills of greenery, crystalline waters, an eye-catching opera house and a progressive approach to ethics for those dispensing financial advice.
Well, if you only agree with three of the four, think again.
Long viewed to be ahead of the curve on ethics and conflicts-of-interest regulation, the Australian government has introduced new legislation that would require all financial advisors to abide by strict new requirements. According to the Sydney Morning Herald, the proposal is in response to “a string scandals in the (financial) sector” and also consumer groups and industry bodies supporting “the moves to lift ethical standards, alongside requirements for higher levels of education and professionalism among planners.” Additionally, companies will be able to adhere to a “mandatory code of ethics without joining an independent professional body under the proposed laws.”
The standards say that new advisors would need to meet education and training standards that would require them to hold a degree, subscribe to a code of ethics, partake in a supervised “professional development” year, take a mandatory national competency exam and adhere to professional development requirements, the latter of which would be developed by a new independent standards body for financial advisers. The plan also states that existing financial advisers would need “to transition to the new standards, with both new and existing financial advisers being required to abide by a professional code of ethics and be listed on an Australian Securities and Investment Commission professional register.”
The draft legislation goes a step further by stating that “the terms ‘financial adviser’ and ‘financial planner’ will also be restricted terms, if providing financial services to retail clients, and will only be able to be used by those persons meeting the education and training standards. Wrongful use of the restricted terms will be a continuing offence, carrying a fine of 10 penalty units per day (approximately $1320 USD) for each day the offence is committed.”