Professional standards
In March 2017, the聽Corporations Amendment (Professional Standards of Financial Advisers) Act 2017聽commenced and introduced reforms to the聽Corporations Act 2001听(Corporations Act). These reforms included applying professional standards to individuals who provide personal advice on relevant financial products to retail clients.
The Minister is responsible for setting the professional standards. This includes:
- setting education and training standards for 鈥榬elevant providers鈥� and approving domestic and foreign qualifications
- approving the format for the financial adviser exam
- setting professional year requirements
- setting continuing professional development (CPD) requirements, and
- developing the (Code of Ethics).
Visit Treasury鈥檚 website for more information on domestic and foreign qualification assessments.
ASIC is responsible for implementing and overseeing the professional standards. This includes administering the financial adviser exam.
Overview of the professional standards
The professional standards聽apply to:
- relevant providers who provide personal advice on one or more relevant financial products to retail clients, and
- persons training to become a relevant provider.
How the professional standards apply to a person depends on the individual鈥檚 personal circumstances and whether they meet certain definitions. See Definitions that apply to personal advice providers for more information.
The professional standards do not apply to persons who only provide, or who are training to provide:
- general advice
- personal advice on products that are not relevant financial products (such as general insurance, consumer credit insurance and basic banking products), or
- personal advice on relevant financial products to wholesale clients.
The professional standards require relevant providers and persons training to become a relevant provider to:
- meet the qualifications standard
- pass the financial adviser exam
- complete a professional year (for persons training to become a relevant provider only)
- participate in CPD requirements including:
- 40 hours each year (this requirement does not apply to persons training to become a relevant provider), and
- for relevant providers who provide tax (financial) advice services, their 40 hours of CPD must include a minimum of five hours in the CPD area of tax (financial) advice, and
- comply with the Code of Ethics 鈥� a set of principles and core values in the areas of ethical behaviour, client care, quality process and professional commitment.
The timeline for complying with the professional standards differs depending on whether the individual is a relevant provider who is an 鈥榚xisting provider鈥� and whether they have met the professional standards within the required timeframes: see Information Sheet 260 Timeframe for passing the financial adviser exam (INFO 260).
For more information on how the professional standards apply depending on the individual鈥檚 personal circumstances, see Applying the professional standards.
Relief from the professional standards
ASIC can grant exemptions from, or modifications to, the law in certain situations. You can apply to ASIC for relief from the Corporations Act. See Information Sheet 82聽Apply for relief听(INFO 82) for more information.
ASIC will generally not grant relief that would reverse the usual and intended effect of these reforms, which is to raise the education, training and ethical standards of the financial advice industry.
AFS licensees
As part of the professional standards, Australian financial services (AFS) licensees must give ASIC additional information about relevant providers they have authorised (including聽provisional relevant providers 补苍诲听time-share advisers). It is a breach of their obligations not to do so and penalties may apply. This:
- allows consumers to check that a relevant provider is authorised and registered to provide financial advice, and
- improves our ability to monitor relevant providers鈥� compliance with the professional standards.
For a full list of the information that AFS licensees must give ASIC to be included on the聽Financial Advisers Register, see聽Information on the Financial Advisers Register.
To add this information to the Financial Advisers Register, see聽Maintain (update) or correct a relevant provider鈥檚 details. To appoint a relevant provider to the register, see聽Appoint (add) a relevant provider. To register a relevant provider with ASIC, see Register a relevant provider.
AFS licensees also have an obligation to ensure the relevant providers they authorise comply with the professional standards.
RG 146 minimum training standards
Regulatory Guide 146聽Licensing: Training of financial product advisers听(RG 146) no longer applies to relevant providers or provisional relevant providers.
RG 146 continues to apply to people who provide:
- general advice
- personal advice on basic banking products, general insurance, or consumer credit insurance, and
- individuals who provide financial product advice on a time-sharing 91AV.
Where can I get more information?
For more detailed information about the professional standards, see the following pages on the ASIC website: