A Charles Sturt University (CSU) financial expert has welcomed a shake-up of Australia's financial services industry, claiming the move is overdue.
The government has agreed to all but one of the 44 recommendations contained in the Financial System Inquiry (FSI) report. Professor Adam Steen from CSU's School of Accounting and Finance believes the changes will lift the profile of the profession and enable it to better meet the needs of clients.
"Financial advisors will now need to hold a degree and subscribe to a code of professional ethics which should start to restore the public's perception of the industry," Professor Steen said.
"Unfortunately, the reputation of financial advisors has been tarnished in recent years through scandals involving a relatively small number of people in the industry."
"The announcement is long overdue both in the sense that scandals involving financial advice and loss of investors' money go back many years, and also the industry has been waiting several months for these recommendations. We can now move forward as an industry."
Professor Steen believes ethics should be the foundation of the new industry requirements.
"A code of professional ethics is a great start and should assist in attracting and retaining the best people," Professor Steen said.
"However, we also need a rigorous compliance and reporting regime which is prepared to administer adequate sanctions for misconduct."
The new requirements will also mean change in the higher education sector.
"Charles Sturt University's Master of Applied Finance has been updated with these developments in mind, with professional ethics central to the course and a capstone subject 'strategic and contemporary financial issues' which presents current ethical challenges and considerations," Professor Steen said.
"Students will now demand these features and universities must evolve their courses or risk extinction.
"Additionally, I believe students will now look for a university's industry connections and the ethics of those connections. For example, Charles Sturt University works with the Financial Planning Association of Australia and with The Society of Trust and Estate Practitioners both of which have strict codes of professional conduct."
For more information about the government's response to the FSI report visit The Treasury website.
For more information about CSU's accounting and finance courses visit the CSU website.