From 1 January, 2019 (two years away), financial advisers will be required to have a degree, and all advisers will need to sit an exam after amendments were passed by the Federal Government last week to raise standards in the industry.
Why has it taken so long?
We’ve all heard the horror stories of people losing their life savings to unscrupulous advisers.
Just last week, a former Westpac home finance manager was jailed for three years for using false information to gain $2.5 million in investment loans from elderly and vulnerable people – including a 98-year-old woman in a nursing home.
Currently financial advisers can become qualified to provide advice in as little as four days, with no specific ongoing training requirement beyond that.
The Certificate IV in Finance and Mortgage Broking needs just three days of face-to-face training.
New standards needed
Existing advisers have two years to pass the new exam and five years to update their degree.
They must also undertake at least one year of professional work experience; take part in ongoing professional training; and meet a Code of Ethics.
In passing the bill, Minister for Revenue and Financial Services Kelly O’Dwyer acknowledged the fact an adviser could gain accreditation in four days has given the industry a bad image.
“That is obviously not good enough and there is clearly room to do better,” she said.
It’s no wonder only one in five Australians seeks financial advice. But when it comes to paying for aged care or planning for our retirement, good financial advice can be invaluable.
We have a relationship with Affinity Aged Care Financial Services and recommend them for trusted financial advice.
ASIC also has a new Financial Advice Toolkit that can take you through the process of finding a financial adviser. Check it out here.