Submissions closed last week on plans for new rules, which are part of the Government’s response to the recent inquiry into the country’s financial system.
New education and training requirements are set to come into force from July 1 next year, and ethics rules from July 1, 2019.
New advisers will have to have a degree, complete a “professional year” and pass an exam. An industry-established body, which will begin operating this July, will set education standards, professional year and continuing professional development (CPD) requirements as well as develop a code of ethics.
Existing advisers will be given a transition process and will be allowed until July 1, 2019 to meet the qualification requirements.
But submitters have warned that many advisers will not be ready by then.
"Courses are expected to be available from 2017," the Association of Superannuation Funds of Australia said. "A two-year period may not be enough for people to top up their education to a degree equivalent qualification on a part-time basis. This is an important issue since if an adviser fails to qualify by 2019 they are no longer eligible for transition and would need to go through the whole education and training process, including a degree or equivalent and a professional year."
Other submitters asked that the new standards body be given the ability to decide on an appropriate transition pathway for existing advisers.
They said relevant experience should be able to be considered.
Australia's regulator, ASIC, has identified problems with adviser education standards.
"Our surveillances of the financial advice industry have consistently found that many financial advisers are not adequately trained or competent to deliver financial advice to investors. This contributes to poor advice outcomes for consumers," Joanna Bird, a senior executive leader in ASIC's financial advisers team, told Australian media.
The legislation is due to be considered by the Australian Parliament soon.
Meanwhile, the United States is putting final touches on its fiduciary rule, which will require advisers to put clients’ interests first. It will mean all banks, brokers, mutual fund companies and insurance agents have to keep fees low and protect clients’ savings from excessive risk.
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