Finance sector industry bodies say a number of legitimate concerns have not been addressed by the Financial Adviser Standards and Ethics Authority in its latest blueprint for financial adviser education. They are also worried that FASEA is moving too slowly.
Under the system FASEA is overseeing, new entrants to the industry financial planning industry will have to undertake degree-level education, starting next year. All participants will have to sign up to an industry code of ethics from 2020. And by 2024 existing practitioners will have to have passed a degree-level qualification. FASEA is also responsible for setting CPD (continuing professional development) requirements.
FASEA released two legislative instruments last week, giving details of requirements under the Government’s new education standards for financial planners. The release follows a consultation process that included 800 submissions. It says it made a number of changes in response to feedback. They include:
New entrants. For new industry entrants FASEA will add a post-graduate career changer pathway, requiring an approved graduate diploma. New entrants will be able to seek recognition of prior learning from the education provider as per their credit and RPL guidelines.
Existing advisers. Holders of the FPA’s five-unit Certified Financial Planner designation, awarded after 2007, and the AFA’s Fellow Chartered Financial Planner designation, awarded after 2014, will be eligible for two credit points.
Advisers will be able to seek recognition of prior learning for the Corporations Act, Behavioural Finance Client and Consumer Behaviour bridging courses. There will be no RPL available for the Code of Ethics bridging course,
Exam. FASEA has merged the curriculum for the financial adviser examination into three modules and will focus on applied knowledge acquired in actual financial advice scenarios.
CPD requirements. FASEA has reduced the number of CPD hours advisers are required to complete from 50 to 40 hours each CPD year, including a maximum of four hours of professional reading.
Foreign qualifications. FASEA says it will recognise advisers who have had their assessments assessed by Department of Education and Training approved bodes such as CAANZ and CPA. FASEA will undertake assessment for a fee of foreign qualifications to determine the relevant pathway to meet its education standard. A database of approved foreign qualifications will be displayed and updated on Fasea’s website.
The Association of Financial Advisers says it has not been consulted on the dates for the FPA and AFA qualifications and did not know why FASEA had chosen those dates. It says it will continue to advocate for a better outcome.
AFA chief executive Philip Kewin says: “A number of our concerns have been addressed but there are a number of concerns remaining, particularly around recognition of prior learning and the outcomes for experienced advisers.
Kewin says there are also ongoing concerns with the CPD requirement. The AFA had advocated for 30 hours.
CPA Australia spokesman Paul Drum says: “There is now only six weeks until commencement of the new regime. Only two of an expected seven draft instruments have been released.”
The SMSF Association is concerned that an accountant holding a limited licence will have to complete training and education they won’t be using in practice.
SMSFA head of policy Jordan George says: “The education load required under FASEA exceeds the type of advice an accountant can actually provide under a limited licence.”