Future thinking should be shared. With that in mind our team publishes insights weekly to help keep you in the (k)now.


Hewison Private Wealth - Insights
Hewison Insights
Draft Legislation on Professional Standards and Life Insurance

Draft Legislation on Professional Standards and Life Insurance

John Hewison
Founder and Director
7 Dec 2015

On Friday, following extended debate and consultation, Assistant Treasurer The Hon. Kelly O’Dwyer introduced draft legislation into Parliament for the further reform of professional standards for financial planners. We hope that this will finally put some realistic barriers to entry to the profession and provide the community with some measurable standard, paving the way for confidence and trust in the financial advice they receive from financial planners. 

In summary:

  • The term financial planner/adviser will be enshrined in law.
  • New financial advisers will require a degree, undertake a professional year and pass an exam.
  • An independent standards setting body will be established from 1 July 2016 to set education standards, the professional year framework and continuing professional development requirements, as well as developing a comprehensive code of ethics for financial advisers.
  • All advisers, both new and existing, will be required to undertake continuing professional development (CPD), be subject to a code of ethics and pass an exam. Existing advisors will be provided with a transition process.
  • The new education and training requirements will be effective from 1 July 2017, with the code of ethics requirements coming into effect from 1 July 2019.

There is some devil in the detail however, and I suspect there will be further debate on these initiatives. For example, the responsibility for the development of a suitable and enforced Code of Ethics must be actively administered by an independent body. In our opinion, that naturally is the role of a professional association like the financial Planning Association of Australia (FPA) which has had these structures in place for over two decades. However, the government has chosen not to enshrine compulsory membership of a professional body similar to other professions.

Further, despite the terms financial planner/adviser to be enshrined in law, which will assist the public to differentiate between those who meet the standards and those who do not, it is disappointing that there has been no separation between “product” and “advice”. Nor has the “fiduciary responsibility” been incorporated. This leaves some grey areas where conflict of interest can exist. I can only hope this is seen as a matter of concern and addressed by the government in the future. 

Welcome change

We at Hewison Private Wealth welcome and support the draft legislation in principle which we have actively advocating for many years and are proud of the public stance we have taken for over 25 years in supporting these new proposed changes.

It’s a shame however that it’s taken so long to introduce initiatives that not only protect the public interest, but also the reputation and of legitimate and appropriately qualified financial planners.

At Hewison Private Wealth, we have held a degree based education requirement since 1995. Beyond this, all of our advisers need to satisfactorily complete a 3-5 year mentoring program whilst undertaking their post-graduate CFP professional designation before we recognise them as financial planners. Further, all our advisers are required to be members of the FPA and subscribe to the FPA’s Code of Ethics and maintain appropriate levels of continuing professional development training.

The information provided above is general information only and individuals should seek specialised advice from a qualified financial adviser. Please contact Hewison Private Wealth for more information. 

As we already comply with, and far exceed the proposed new standards, we will continue to maintain our existing high standards and remain actively involved in the drive for professionalism. We look forward to the profession as a whole, implementing the changes and bettering the standard nation-wide. 

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.