July 3, 2018
The AFA has called on the Government to extend the timeframes for financial advisers to meet new education requirements, claiming delays in setting standards will make it difficult to complete required study within current timeframes.
The Association made the call as part of its submission to FASEA on proposed education standards in which it also claimed the education body had overstepped the intention of the Federal Parliament by not considering some forms of education and training already undertaken by advisers.
In pushing for extended timeframes, the AFA called for the 31 December 2023 deadline for existing advisers to achieve degree equivalence to be pushed out to 31 December 2024 and for the 31 December 2020 deadline to complete the Registration Exam to be pushed out to 31 December 2022.
“…advisers studying the Graduate Diploma are unlikely to be able to start until the beginning of 2020…under the existing deadline, this cohort of advisers would only have four years left”
In the submission, the AFA argued the preparation for the exam was linked to the study required to achieve degree equivalence and consideration must be given to the time required for existing advisers with no degree who would be required to do the most study.
“We believe that this should be considered from the perspective of an existing adviser with no degree who needs to do the full eight subject Graduate Diploma,” the AFA stated, adding it was not realistic to expect an adviser working full time to study more than one subject every six months.
The AFA added that this cohort of advisers, which was likely to be a large proportion of the advice sector, should be allowed five years to complete the required eight subjects of study given they have yet to see the final shape of requirements or gain access to courses.
“With the Legislative Instrument not due to be finalised until December 2018, it will take education institutions up to 12 months to have their courses developed and approved by FASEA,” the AFA noted.
“It will take extra time for advisers to choose the most suitable course for them. This means that advisers studying the Graduate Diploma are unlikely to be able to start until the beginning of 2020. By this time, under the existing deadline, this cohort of advisers would only have four years left. We do not believe that this is enough for those who have to do eight subjects,” the submission stated.
Based off this revised timeframe, the AFA claimed the new date for the Registration Exam would allow advisers to have completed sufficient study for degree equivalence to attempt the exam while the current timetable would mean many advisers would be forced to complete the exam less than 12 months after having commenced any form of study.
The AFA also called on FASEA to consider a number of key criteria about recognition of prior learning listed in the Explanatory Memorandum (EM) to the legislation outlining the changes to financial adviser professional standards.
“It would appear that FASEA have gone further than the Parliament had expected…”
The Association pointed out the EM stated existing advisers were only required to undertake study to bring their qualifications in line with the new standards and “It is not expected that existing providers will be required to complete a three year degree”.
Additionally, the AFA highlighted that the EM also directed that prior learning be recognised when it stated, “For the avoidance of doubt, the new law explicitly states that courses undertaken before the new law commences must be taken into consideration. The body may take into account diploma or degree courses, licensee training courses or CPD”.
Commenting on these provisions within the EM, the AFA claimed that FASEA’s current lack of recognition of prior learning, CPD and professional designations ran counter to what had been intended by the Federal Parliament.
“The FASEA proposals do not address many of the important provisions discussed in the Explanatory Memorandum. It would appear that FASEA have gone further than the Parliament had expected as defined by the Explanatory Memorandum,” the submission stated.