Proposed mandatory professional standards on the way

Early this week, Financial Services Minister the Hon Kelly O’Dwyer MP confirmed the Turnbull government will introduce new laws to mandate professional standards for financial advisers this year.

But general insurance brokers can rest easy – for now – as we have been carved out of these proposed new laws.

“This is the result of over two years’ lobbying by NIBA, and our consistent arguing that there is no evidence of systemic poor advice on general insurance products and services,” says Dallas Booth, NIBA CEO.

But he emphasises: “Brokers have a clear education path to achieve and maintain to claim to be a Qualified Professional Insurance Broker.”

The ongoing reforms are the result of numerous high profile scandals within the financial sector and various government inquiries into the broader financial services industry.

Specifically the changes to professional standards for financial advisers include:

  • compulsory education requirements for new and existing advisers, at a degree level or equivalent
  • supervision requirements
  • a code of ethics
  • an exam to set a common benchmark across the industry
  • ongoing professional development.

An independent standards body will be set up to develop the exam, code of ethics and education and development requirements.

Indeed, Booth says by being carved out of the compulsory education requirements, that is, for financial advisers to hold university degrees, NIBA has saved brokerages over $28,000 a year per broker.

“We will continue to argue your case before government, Members of Parliament and regulators”, he adds, “as these things never really go away”.

“We will keep showing them that general insurance brokers are committed to acting in the best interests of their clients by delivering sound, professional advice and support on their risk and insurance needs.”

Minister O’Dwyer said the government will be holding final consultations with industry and consumer groups later this month on this package of changes. The aim is to have these new standards start on 1 January 2019, with advisers reaching degree-equivalent status by 1 January 2024.

NIBA has written to Treasury to make sure we are included in the final consultation on these changes. We will keep members informed of developments in this area as they happen.

Read more about how NIBA represents brokers’ interests to government and regulatory bodies in the November issue of Insurance Adviser to hit your desks in a couple of weeks. Email to ensure you are on our list to receive the magazine.