Proposed education standards for financial advisers will shake up the SMSF advice industry.
Proposed legislative changes will require all existing financial advisers (i.e. advisers who provide advice between 1 January 2016 and 1 January 2019) to:
- Comply with a new Code of Ethics by 1 January 2020: financial advisers must comply with a new Code of Ethics developed by the new education standards body.
- Pass a standardised exam by 1 January 2021: the exam will be set by the education standards body. Unfortunately, no exceptions will be given to this requirement (even if you are already heavily experienced in providing financial services).
- Hold a Bachelor Degree by 1 January 2024: financial advisers must hold a bachelor or higher degree (or equivalent qualification) that has a commerce or finance link. This removes the existing requirement of ASIC RG 146 to hold a ‘diploma’ equivalent level of education.
- Complete minimum CPD hours per year: financial advisers must complete a set number of CPD hours per year (as determined by the education standards body), and must retain evidence of completing these CPD hours for at least 12 months.
The AFS Licensees that advisers operate under must also enter into a ‘compliance scheme’ by 15 November 2019. This will be similar to the AFS Licensee’s existing EDRS requirements.
Guidance about what the Code of Ethics, exam and CPD requirements will look like is expected to be released once the new education standards body has been established.