The Association of Financial Advisers has registered its strong dissatisfaction with multiple elements associated with the new professional standards requirements proposed to be implemented by FASEA.
In a message to members late last week, AFA CEO, Phil Kewin, noted the Association was greatly disappointed by the lack of change delivered by FASEA in response to the AFA’s submissions.
Specifically, Kewin was referring to:
Adviser Education Standards
Kewin noted, “…despite having received 92 submissions, FASEA chose to announce only two changes as a result of the consultation.” He added that the AFA was also surprised that the final Standard was announced only five working days after submissions closed: “As the LI [Legislative Instrument] is only a list of approved degrees and there is little more detail in the Explanatory Statement, we remain particularly concerned about the continuing lack of clarity in this area.
Kewin said the Association was especially disappointed at the lack of change in FASEA’s final package of instruments, particularly given the number of constructive recommendations it said it had provided. Click here to access the AFA’s submission to FASEA on Education Standards for Financial Advisers.
Adviser CPD Requirements in 2019
The AFA was surprised the new CPD requirements have taken effect from 1 January 2019, and applies to all advisers. Kewin wrote:
“We were surprised that the new CPD requirements have been released with effect from 1 January 2019 and that the financial advice sector has had no time to plan or prepare. We recommend that advisers take care to check that any CPD that they do this year complies with the new FASEA requirements.” He also suggested advisers refer back to their licensee for further guidance. See also: FASEA Latest.
FASEA Exam
According to Kewin, the AFA continues to have a number of concerns with respect to the proposed adviser exam in terms of:
- The curriculum
- The cost
- The length
- The type of questions
- Feedback for unsuccessful candidates
- Frequency/locations/access
- Alignment with study towards complying with the Education Standard
Click here for the AFA’s Exam Standard submission to FASEA.
Code of Ethics
Kewin noted the AFA provided its submission to FASEA on the Authority’s proposed Code of Ethics on 19 December 2018:
…we are concerned about the lack of clarity on what is required of financial advisers
“We remain committed to high ethical standards; however we are concerned about the lack of clarity on what is required of financial advisers and whether the practical reality of operating as a financial adviser has been taken into consideration in the drafting of these Code of Ethics standards.”
Click here to read the AFA’s Code of Ethics submission to FASEA.
Next Steps
Kewin has stressed to his members the key point that the mechanism FASEA is using to set the law is in the form of Legislative Instruments which detail the Authority’s requirements. He noted these Legislative Instruments do not need to be passed by the Parliament, and that, importantly, FASEA also has the power to change its Legislative Instruments.
While he said these instruments must be treated as law, and that advisers should prepare accordingly, Kewin noted elsewhere in his message that these instruments can be disallowed by either House of Parliament and that FASEA can change them: “…which is what we are aiming for.”
As well as expressing its concerns with FASEA, a delegation from the AFA is also set to meet with the Assistant Treasurer, The Hon Stuart Robert, this week, where it will seek to outline the Association’s position – both its concerna and its proposed solutions.
Phil, whilst FASEA has the ability to change policy and government can move to disallow the policies, what are the chances of either happening? Australian governments have no track record on repealing legislation or changing things soon after becoming law. The lobbying opportunity was lost in the early days when various institutions decided that “..to become a profession, all advisers need to be degree qualified..” and without much more apparent thought, the Minister thought that was the view of all participants and brought in exactly that. No consideration of impact or of past experience or education. I have spoken to Stuart Robert in person and whilst he agreed with my concerns a year ago… it appears that now he has the power to make changes, he is reluctant to do so. No longer responds to me… I am in his electorate and he clearly does not appreciate my vote. So I will take that elsewhere. Good luck Phil and mention Steve Legg to him… would love to be there! I fear the horse has bolted and most advisers are resigned to the changes given that i have not met anyone who has actually spoken to their MP on the matter.
Phil, you are one of very few people that seem to have a grasp of the situation and many people admire your stand and willingness to highlight the issues and complete lack of understanding or interest from the FASEA vested interest policy peddlers.
There is a simple solution to all this and as history shows, trying to negotiate with, or educate people that are not listening, is a waste of valuable time and money.
The solution is to demand that the perpetrators of policy direction, must be HELD TO ACCOUNT for their agenda’s.
Just as Advisers must follow the Best Interest Duty, make every person accountable for their actions and if FASEA refuse to be brought to heel, then as an industry, we just refuse to talk with those people until they are removed and replacements with some commercial experience and common sense are brought back to the table,
The ‘United we win and Divided we fail” slogan is actually a very powerful tool and can defeat any Corporate or Government action that is detrimental to the good of the majority.
As an Industry, just refuse to talk or negotiate with FASEA until all perpetrators that are not listening or refusing to listen to reason, are removed.
Surely after the years of investigations and the fiasco that is LIF, that lesson should have been learned.
The standard attack and defense strategy of incompetent or inexperienced or vested interest groups, are to push their agenda aggressively and pretend to listen, by inviting submissions, then ignore most of it and throw up a wall of incongruous information to bury your opponents in red tape and data.
If you want to defeat these people, throw it back at them and demand a full risk reward analysis, based on real world criteria, before you bother to try and talk or educate them as to the folly of their requirements.
Liberal Government has been weak at the knees on this Issue,
No wonder Country has no faith in them
Liberal Government has been weak at the knees on the whole FASEA approach
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