Seniors have welcomed a report recommending higher education and professional standards for financial advisers but said the 2019 deadline for compliance was too far away.
The Parliamentary Joint Committee (PJC) Inquiry report has called for Australian financial planners to meet tougher professional, ethical and educational standards, including a minimum degree qualification.
National Seniors said that Australians – particularly those near or in retirement – wanted better qualified financial advisers looking after their hard-earned savings.
“Too many older people have trusted financial advisers who are ill-equipped to steer their retirement funds safely towards reasonable returns,” National Seniors chief executive Michael O’Neill said.
“Other advisers have acted unethically or unprofessionally, and investors have lost everything as a result.
“We don’t want to see another Commonwealth Bank scandal.”
But O’Neill said the PJC’s recommended 1 January 2019 deadline for compliance with the new standards was too far away to bring peace of mind to many seniors.
“People want to know that their advisers are trustworthy and capable now – not in four years’ time.
“The government and the financial services industry need to impose tighter standards sooner, or risk further destroying the confidence of the very people from whom they make a living.
“Advisers have an important role to play but that relies overwhelmingly on confidence amongst customers.
“Confidence has been destroyed and will only be rebuilt with a much greater sense of urgency than a 2019 deadline for compliance with new standards offers.”
The PJC’s recommendations also include:
- The term 'general advice' in the Corporations Act 2001 be replaced with the term 'product sales information' to better reflect the nature of that information.
- ASIC should only list a financial adviser on its register when they have satisfactorily completed a structured professional year and passed a registration exam set by the Finance Professionals' Education Council.
- The government requires mandatory ongoing professional development for financial advisers set by their professional association in accordance with Professional Standards Councils requirements.