PJC Inquiry into education and professional standards
On 19 December 2014, the Joint Committee on Corporations and Financial Services released the report of the Inquiry into proposals to lift the professional, ethical and education standards in the financial services industry.
The PJC Inquiry Report recommendations include:
- A minimum degree qualification for all new financial planners
- The Finance Professionals Education Council (FPEC) to become an independent body and gatekeeper of minimum education standards and requirements, setting the curriculum for the audit of education providers
- The FPEC to be controlled and funded by professional bodies approved by the Professional Standards Councils, which are required to establish codes of ethics which are compliant with the requirements of a Professional Standards Scheme and are approved by the Professional Standards Councils
- Mandatory ongoing professional development for financial advisers
- Completion of a structured professional year as a prerequisite to being registered as a financial adviser
- Mandatory membership of an approved professional body
- A co-regulatory model that recognises the role of professional bodies in maintaining and enforcing codes of conduct
- The term ‘general advice’ should be replaced with ‘product sales information’, and the term ‘personal advice’ replaced with ‘financial advice’
- The term ‘financial adviser’ and ‘financial planner’ to be enshrined in the Corporations Act, and only individuals registered as a financial adviser can use these titles
- A national competency exam for financial planners as a prerequisite to being registered as a financial adviser.
These recommendations, with the exception of a national exam, overwhelmingly reflect the FPA’s recommendations to the PJC and FPA 10 Point Plan.
The Assistant Treasurer, The Hon Josh Frydenberg MP has announced further consultation with the financial services sector and other stakeholders on the PJC report on raising education, ethical, and professional standards in financial services. While some matters (such as changes to the definition of financial advice) will be dealt with in the FSI process, the Assistant Treasurer will engage in further consultation on the majority of the Report until 30 June.
The FPA will work with the Government to ensure consideration is given to the practical issues of any subsequent changes for both consumers and financial planners.
Read the media release
Download our Q&A on how the recommendations may affect you
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