The future is uncertain for many people, and the financial services industry faces a number of challenges, with some experts warning that it could take up to 20 years for the sector to recover from a massive and rapid decline in the number of students entering and graduating from university.
But experts believe there is a new model that is emerging that is both cheaper and more efficient than the current system, and it is also the one that will ultimately drive the future of education and the way the financial sector is governed.
Key points:Financial advisors and students may no longer have to rely on a traditional career guidance service to find a financial adviserThe Financial Services Regulatory Authority (FSRA) will regulate the new model of financial guidance for all AustraliansThis regulator will set out how the new system of financial advice will work and who will be required to be certified to deliver itFinancial adviser students, however, will not be required, as they will still be able to complete their degree and continue working for an industry-recognised professional company that is licensed to provide financial advice to Australian students and graduates.
Students will still have to complete a Bachelor of Commerce degree before they can apply to the industry-approved company.
But the regulator will require the Financial Services Professional (FSP) to be accredited by the Financial Standards Authority of Australia (FSSA) before it will be considered by the regulator.
Students can now apply for a licence to work for a FSP.
The regulator said it would also establish a system of fees for FSPs, and will also require them to have at least three years of experience providing financial advice.
“The FSP will be a fully licensed professional service that will offer financial advice, and that will be based on a three-year licence,” the regulator said in a statement.
“This licence will cover the FSP’s business model, the services it provides, and its financial advice activities.”FSSA chief executive officer Greg Mather said the regulator was aiming to regulate the industry “in a way that is sustainable and equitable for Australian students, taxpayers and the FSB”.
“The regulator is confident that the new licensing regime will allow the FSSA to ensure that the FSM and FSP are providing high-quality financial advice for Australian consumers,” Mr Mather told reporters.
“In the coming months, we will also be looking at the licensing of new FSP entities and the licence fee structures.”FSSPs are regulated by the FASB, which is the body that sets the FSA’s rules and regulations.
Under the new scheme, the FSFSA will set up a new agency that will manage the regulatory framework and provide regulatory guidance to the FSRB, the regulator responsible for financial institutions and the regulation of financial products and services.FSSA also has the authority to make rules on the licensing and certification of FSP firms.FSMA president Mike Gannon said the new regime was “a significant milestone” for the financial industry.
“We are taking an exciting new approach to regulation that will allow FSP services to be provided in a way which is sustainable, equitable and will provide the financial institution with the best service for its customers,” he said.
“These new regulatory requirements are also a significant milestone for the industry, for the FSU, and for all those involved in the financial education sector.”
He said the FFSMA would continue to work with the industry and stakeholders to establish new licensing and licensing standards for the regulated financial services.
“It is clear that we must do more to make the financial institutions of the future better informed, accountable and accountable for their customers’ best interests,” he told the ABC.
“As the regulator, I will continue to advocate for this industry to be a better place to work, and to offer the best financial advice available.”
The regulator says it will not require FSP graduates to have a degree in finance to take part in the new regulatory scheme.
Financial advisors may no long have to depend on a career guidance site for advice.
The FSFRA is currently considering the changes that will see all students and professionals applying for a Financial Advice Licence (FAL) – a document that will identify the financial adviser that is to provide advice on a student’s application.
But in a submission to the regulator this week, a representative of the Australian Financial Services Association (AFSA) said that “anybody” including students, parents, or employers, were eligible to apply.
The AFSA said it believed that the licence was not needed because it was “not a requirement for anyone to have an FAL”.
“We believe it’s important that all Australians are able to choose a financial advisor that is based on their qualifications and is not a requirement of an FSLA licence,” it said.FSRA chief executive Mr Mannon said it was too early to predict how the regulator would decide whether to move forward with the new approach.