FASEA Latest

The Financial Adviser Standards and Ethics Authority released a raft of statements just before Christmas which updated the sector on areas including future CPD requirements for advisers, newly approved degree courses and requirements for new entrants into the advice sector:

CPD Points Update

FASEA announced on 21 December that it has registered the Legislative Instrument for its Continuing Professional Development Standard, following a period of industry consultation.

Under the standard, advisers will required to complete 40 hours of CPD each year, where 70 percent of those 40 hours will be required to be approved by the adviser’s licensee, including a maximum four hours of professional reading.

The Authority detailed the minimum required hours per CPD category as being:

  • Technical: Five hours
  • Client care and practice: Five hours
  • Regulatory compliance and consumer protection: Five hours
  • Pofessionalism and ethics: Nine hours

The balance of 16 hours, according to the Authority, will consist of qualifying CPD and is available to allocate to areas of an adviser’s greatest need, which may include technical competence or industry specialisation.

FASEA noted that feedback during its consultation period raised a number of suggestions it has adopted, including:

  • A transition period to 31 March 2019 for documentation of CPD Policies and Plans
  • An increase in the number of formal study hours that may count towards CPD from 25 to 30 hours
  • Recognition that CPD may cover more than one knowledge area and may count across multiple CPD areas as long as there is no double counting of hours
  • Licensees having the capacity to maintain CPD records on behalf of their advisers
  • Part time advisers with licensee’s prior written consent can be entitled to a 10 percent reduction to 36 hours of required CPD while still being required to cover the minimum knowledge areas

Adviser Qualifications

On 24 December FASEA announced it had registered the legislative Instrument for its Relevant Providers Degrees, Qualifications and Courses Standard.

Under this standard, “…advisers are required to complete a bachelor or higher or equivalent qualification…”. FASEA says its determination of approved, relevant and non-relevant degree courses includes a list of current and historical degrees it has approved and this list will be updated on an ongoing basis, as additional courses are approved.

Stakeholder feedback provided during the consultation period and adopted by FASEA include:

  • Approval of the newly formed Bachelor of Commerce (Finance and Financial Planning) at Curtin University
  • Approval of the re-accreditation of Western Sydney University’s Bachelor of Accounting Financial Planning or Financial Planning and Taxation and Master of Financial Planning
  • Addition of the term ‘Financial planning’ (which includes financial advice areas of insurance, superannuation, retirement, estate planning etc) and investments (which include all types of investment eg shares, derivatives, foreign exchange, options etc) into the relevant degree definition
  • Recognition of prior learning, where advisers holding a non-relevant degree who have completed between 4 and 7 of the relevant degree knowledge areas will be awarded 2 credits
  • Clarification that courses/subjects are single units of study of approximately 120 hours of learning as per the AQF (eg 8 course Graduate Diploma and 24 course Degree)

New Advisers and the Professional Year

FASEA has determined that new advisers from 1 January 2019 will be given the appellation of ‘Provisional Financial Adviser’ or ‘Provisional Financial Planner’.

New advisers who are undertaking work and training requirements will be able to use either of these terms once they have passed their examination, which the Authority says will typically take place midway through the new adviser’s Professional Year.

FASEA notes the Professional Year “…will be the equivalent of one year’s full-time work and it will comprise 1600 hours, of which 100 hours is to be structured training.” It adds that a Professional Year plan will be required to develop the following competencies:

  • Technical competence
  • Client care and practice
  • Regulatory compliance and consumer protection
  • Professionalism and ethics

  • Jeremy Wright

    All aboard, the train to destruction.

    It is so blindingly obvious, just how ridiculous the FASEA process and direction, has been from Day One.

    The first two questions if change is being called for, is what are you trying to achieve and what is the potential outcome? both positive and negative.

    The potential outcome to what is trying to be achieved, is the exact opposite to what has been peddled and the REAL outcome will be chaos that will impact countless people.

    For every action, there is a reaction.

    Public servants have never been able to fully understand the big picture, mainly because they work and live in a sheltered environment that carries little risk to themselves.

    They do not have the necessary experience or care to understand the true risks and costs of their theoretical assumptions and Big Business are too scared to rock the boat, in case they upset the Regulators, who may then start investigating a bit deeper into their processes and structures.

    What we end up with, is the Opal Tower world of ticking boxes to SAY things have been done to a standard, then make excuses and start blaming each other when the walls start to crack.

    It is the pink batts saga all over again, where the Government come up with an idea,
    then put in place ridiculous processes that do not work and Presto, Billions of dollars wasted, lives destroyed unnecessarily and a totally unworkable solution that is then scrapped until the next Great idea from the Government arises.

    And the merry go round continues.

    FASEA is the next pink batts fiasco and watch the scramble of denials and excuses when the S–t hits the fan again.

    • bigal

      Beautifully put Jeremy and I love the metaphors! Yep it’s all heading for a big train wreck.
      You are correct, public servants have no idea because they have never lived in the real business world. There will be a cascading mass exodus from the industry over the next few years.
      Those who can should just get out, retire and enjoy life which is far too short..

      • Squeaky_1

        Politicians and members of FARCIA who are responsible for this abject mess, for forcing 30 year+ advisers from the industry (I’m thinking risk advisers but others too) should have charges brought against them in court and be forced to explain a risk/reward scenario for these idiot changes that are ruining adviser businesses, their retirement and having ZERO impact for good for the client. Indeed the client will shoulder higher cost due to these purely self-interested entities forcing these changes. Too sad for words. I call for charges to be laid on FARCIA and the facilitating govt employees, politicians.