The Australian Government has just released draft legislation to “raise education, training and ethical standards for financial advisers”. Click here for the media release.
Here’s a summary of the proposals:
- You’ll need an approved degree or degree equivalent (set by a new independent industry-established body).
- You’ll need to have completed a professional year.
- You’ll need to pass an exam.
- Advisers will be required to undertake continuing professional development and be party to a code of ethics.
I’m really excited about these proposals and think that it will be a milestone moment for financial planning in Australia. In my view it’s long overdue.
Compliance is probably the way it is because the bar was too low. Hopefully, higher standards will eventually lead to less red tape, simplified Statements of Advice and empower us advisers to deliver quality advice in a practical manner.
I treat Statements of Advice seriously and probably spend too much time on them. It would be great to be able to redirect that resource to more face-to-face meetings to ensure clients really understand.
I think 1-2 extra meetings to dig deep into the advice and strategy, vs 5-7 hours working on the Statement of Advice is a better use of time for all stakeholders and will lead to lower fees and superior results.
Side note, it’s only the exam that will be new to me.
By Ray Ong
Contact us on 08 9381 6811 for a complimentary consultation. Ray is a CERTIFIED FINANCIAL PLANNER® and LIFE RISK SPECIALIST® and has a Bachelor’s of Commerce in Financial Planning (with distinction). He is a member of The Financial Planning Association of Australia. We are based in Perth, Western Australia and specialise in retirement planning, wealth accumulation and wealth protection (life and disability insurance).