Professional standards for financial advisers

In March 2017 reforms were introduced into the Corporations Act 2001 by the Corporations Amendment (Professional Standards of Financial Advisers) Act 2017 to raise the education, training and ethical standards of financial advisers.

As part of these reforms, since 1 January 2019 professional standards have applied to financial advisers who provide personal advice on relevant financial products to retail clients. See How the reforms affect you for more information.

The timeline for Australian financial services (AFS) licensees and financial advisers to comply with the professional standards is set in the Corporations Act 2001. For what to do by when, see Timeline for the reforms.

Professional standards for financial advisers

The professional standards require financial advisers to:

  • have an approved qualification
  • pass the financial adviser exam to test the practical application of their knowledge in key competency areas
  • participate in 40 hours of continuing professional development (CPD) per year to maintain and extend their professional capabilities, knowledge and skills, and
  • comply with the Financial Planners and Advisers Code of Ethics – a set of principles and core values in the areas of ethical behaviour, client care, quality process and professional commitment.

Anyone wanting to become a financial adviser must also complete a full-time professional year that includes at least 100 hours of structured training.

For more information about the professional standards, see:

FASEA's role in the professional standards

The Financial Adviser Standards and Ethics Authority (FASEA) is currently responsible for implementing and overseeing the professional standards. FASEA is an independent body, governed by a board and funded by industry.

FASEA's role includes:

  • approving the relevant qualifications and exam
  • developing the Code of Ethics, and
  • setting CPD and professional year requirements.

FASEA provides detailed information on the standards, including:

  • How to prepare and register for the FASEA exam.
  • CPD requirements and log book template.
  • Approved higher education providers and degrees list.
  • Approved recognition of prior learning (RPL) list.
  • Application process to register as a new entrant.

Visit the FASEA website for more information.

ASIC's role in the professional standards

Since November 2019, AFS licensees have been required to update ASIC's Financial Advisers Register when authorising a financial adviser, when a financial adviser ceases to work under their licence, or when information about the financial adviser they have authorised changes, including the adviser's qualifications and address.

This helps consumers to check that a financial adviser is qualified to provide advice.

Government announcement of new Single Disciplinary Body

Recommendation 2.10 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which the Government accepted, was to establish a new disciplinary system for financial advisers. On 9 December 2020, the Government announced that it will give effect to recommendation 2.10 by expanding the operation of ASIC’s Financial Services and Credit Panel (FSCP). The Government will wind up FASEA and move the standard-setting functions of FASEA to the responsible Minister and Treasury. ASIC will be responsible for administering the financial adviser exam.

The Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Bill 2021, which gives effect to the Government’s announcement, was tabled in Parliament on 24 June 2021. The Bill has been passed by the House of Representatives but not yet the Senate: see Better Advice Bill introduced into Parliament, 24 June 2021.

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Last updated: 22/09/2021 03:04