Financial advisers may be required to complete 50 hours of Continuing Professional Development (CPD) and to track their own compliance with that standard for a period of six years, under new proposals released by the Financial Adviser Standards and Ethics Authority (FASEA).
The Authority proposed the suggested hours as part of a consultation paper on CPD that is open for industry comment until 31 August 2018, stating 70 per cent of the CPD activity per year must be approved by an adviser’s licensee.
Additionally, 25 CPD hours per year could be drawn from formal relevant education, including degree equivalent studies to meet legislative requirements, and any formal study towards other qualifications and designations relevant to the work of the adviser.
The proposed 50 hours of CPD sets a benchmark that was absent in Regulatory Guide 146, which did not prescribe a minimum number of CPD hours per year.
Instead, the regulatory guide stated no minimum number of hours was set “…because the time required will vary according to the adviser’s activities and level of experience,” adding the figure would be set by licensees, and also by professional bodies for their members. Currently, 30 CPD hours is a standard set by many licensees and associations across a twelve-month period.
“Education that is measurable, appropriately assessed and leads to further qualification outcomes for participants is preferred…”
In the paper, FASEA stated advisers and licensees will now each have a role in developing and maintaining a CPD plan with advisers required to “…undertake sufficient continuing professional training to maintain competence at a level appropriate for the professional services (including financial product advice) that the relevant provider provides, or intends to provide, and keep up to date with developments relevant to their practice”.
Advisers would also be required to maintain a continuous, up-to-date and accurate record of completed CPD activities used to meet the proposed Standard for six years from the end of each CPD year and provide that record to their licensee to ensure they are meeting annual CPD requirements.
Licensees would be required to maintain and publish a CPD policy for advisers which would outline the process for approving CPD activities and the hours allocated to each activity.
Licensees would also be required to ensure CPD training was provided by relevant providers with FASEA stating it “…does not propose that it will accredit/approve CPD activities or providers for CPD” but would provide a ‘principles-based guide’ to ensure consistency in how licensees assess CPD activities and providers.
The consultation paper also provided a breakdown of the time advisers would be expected to commit to different forms of CPD activities as follows:
- Technical competence – 5 CPD hours minimum per year
- Client care and practice – 5 CPD hours minimum per year
- Regulatory compliance and consumer protection – 10 CPD hours minimum per year
- Professionalism and Ethics – 10 CPD hours minimum per year
- Other Adviser/Licensee Selected CPD – 20 CDP hours minimum per year
The paper also noted that while formal relevant education would be counted up to a maximum of 25 CPD hours per year, ‘non-formal’ education would also be counted for CPD purposes, including that related to gaining a professional designation, that related to meeting requirements for specific forms of financial advice, and sessions and workshops at conferences and PD days.
“Education that is measurable, appropriately assessed and leads to further qualification outcomes for participants is preferred as it more likely provide structured and independent results for the participant’s work and training records,” the paper stated.
Chartered accts? 40hrs CPD
CP Accountants? 30hrs CPD
GP’s? 50hrs CPD
Financial Planners? 50hrs (plus current 20hrs TASA?)
The Lawyers who force all this?………..10hrs
Well pointed out Simon. Feedback we recently received in our office is that apparently 40% of advisers will be exiting the industry over the next few years because of LIF and these further education impositions. Unfortunately the powers at be will not get the message until it is too late!
I’d love too say I’ll sit back and watch the carnage and enjoy the humour ! However Mum and dad clients will suffer…..
just to make these morons feel like they’ve cleaned up things… meanwhile banks and amp lie more than the average criminal behind bars!
Hang on CFP’s with what is perceived as a better education standard than the average financial planner are required to do 40 hrs a year CPD points and with the advent of being registered with the TPB adds another 20 hours of CPD points a year.
In other words all up 60 hours of CPD points or 180 over 3 years.
That’s what higher education and perceived experience is our reward.
Go figure !
Well and truly over this ongoing harassment and targeted destruction of our industry. Extra CPD, an exam across everything (but fail it and ASIC will hunt you down) and of course a uni degree. All this to provide advice on 5 insurance products. And all this under a LNP Govt, God help us if Short on’s union gets in!
The “Silver lining” in all this is we will be the most educated people on the Dole Cue ?
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Actually I think that raising the bar on CPD would have been a much better approach than the ludicrous degree and FASEA proposals we currently have. For example those specialising in risk or something else could have been made to complete x amount of CPD each year in their chosen field and you could include compulsory ethics. Making it 50 or even 100 points a year to retain your license would have been better and more relevant approach.
Instead we have the majority of advisers with years of experience forced back into useless degrees that only benefit the universities and not the actual customers.
Most advisers won’t do this for a few extra years, especially when you are looking at $20K plus costs and the time in an industry where its becoming harder and harder to make a reasonable living anyway.
So there will be very few advisers in 6 years. That is going to be a fact and very few but the richest customers will be able to afford financial advice in the future.
So instead of benefiting the uni’s we could have ensured a stable future for the industry as well as raising the bar through CPD. I wonder if the government will wake up to this in a years time when hardly any advisers have signed up to relevant degrees and only a small percentage are already relevantly qualified.
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