19 February 2015
Media Release - #2015008, 2015

Public consultation commences on proposals to lift the professional, ethical and education standards in the financial services industry

The Government welcomes the recent report from the Parliamentary Joint Committee on Corporations and Financial Services (the Committee) on its inquiry on proposals to lift the professional, ethical and education standards in the financial services industry.

I wish to thank the Committee, particularly its Chair, Senator David Fawcett, the organisations and individuals who made submissions to the inquiry, as well as all those who gave evidence at its public hearings.

Financial advisers play a very important role in Australia, helping consumers to plan for their retirement, and to manage the financial risks and opportunities of life.

Importantly, the Committee's report makes it clear that the current regulatory arrangements dealing with training of financial advisers are no longer sufficient to adequately protect consumers and maintain public confidence in the industry.

It is now time to capitalise on positive industry momentum and put in place an enduring framework to improve the qualifications and competence of financial advisers, and to enhance the financial advice industry's professional standards and ethics.

The Committee recognises that this will be best achieved through a co-regulatory model in which Government, professional associations, industry and academia all work in partnership.

The Committee's recommendations draw from the practices of established professions such as law, medicine and accounting, and the best practice regulatory frameworks applied to financial advisers overseas.

The Government will carefully consult with all stakeholders before making any policy decisions on the Committee's recommendations, including on appropriate implementation and transition timetables. Consultation will occur until the end of June 2015.

Several of the inquiry's recommendations, including those on clarifying who can provide financial advice, and those relating to amending the Corporations Law definitions of "personal advice" and "general advice", will be considered as part of the Government's response to the Financial System Inquiry, with consultation on that inquiry closing on 31 March this year.

It is imperative that Australians have access to financial advice they can trust, and which is affordable. The Government's goal is to deliver an efficient, transparent and competitive financial services system, capable of fulfilling the needs of consumers, and allowing industry growth and innovation.

The report and further information regarding the inquiry is available on the Committee's homepage.