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Inquiry into Proposals to Lift Professional, Ethical and Education standards in the Financial Services Industry
On behalf of the Parliamentary Joint Committee on Corporations and Financial Services, I present the committee’s report of its inquiry into proposals to lift professional, ethical and education standards in the financial services industry. I seek leave to make a short statement in connection with the report.
This issue has been a hot topic, so I am pleased to have the opportunity to rise today to present a report on the Parliamentary Joint Committee on Corporations and Financial Services’ inquiry into proposals to lift the professional, ethical and education standards in the financial services industry.
Whilst the committee concluded its work on the inquiry late last year, today presents the first opportunity to present the report to the House.
The period of time in which the inquiry was conducted has been a period of significant change and scrutiny of the financial advice industry.
Whilst the committee has sought to acknowledge that increasing the professional, ethical and educational standards applied to the financial advice industry is only one of a range of means by which consumer’s interests can be protected, it is of course an important mechanism to help reduce the risk of industry failure.
The committee’s recommended approach to increasing safeguards for consumers includes the following:
Clarifying who can provide financial advice by changing the terms ‘general advice’, and ‘personal advice’ and requiring individuals to be registered in order to provide financial advice;
Setting a standard for the qualification and competence requirements of financial advisers through the establishment of an industry based independent finance professionals education council; and
Enhancing professional standards and ethics by requiring financial advisers to be members of a professional association which has a code of ethics compliant with a professional standards scheme under the Professional Standards Councils.
The committee further recommends that the finance professionals education council set and monitor the educational framework that applies to all financial advisers, which includes requirements for a degree qualification, an assessment of competence through a structured professional year, a registration exam and mandatory ongoing professional development.
The committee also recommends that the finance professionals education council approve pathways for experienced advisers and career change professionals to meet educational and professional year requirements.
On behalf of the committee I would like to thank all of those involved in providing advice to the committee and I thank the secretariat for their tireless report. I commend the report to the House.