July 24, 2019
Affinia chief, Marcus O’Sullivan, shares how licensees can support the adviser community as they transition to the new minimum advice standards mandated by the Government and implemented by FASEA…
With rapid changes occurring in the financial advice industry, licensees need to look beyond their traditional focus on financial products and place emphasis on supporting advisers to comply with the new advice standards and regulations.
The value of financial advice – helping people to tailor their plans to achieve long and short-term goals and protect their assets – has grown in recent years, driven by the demand for calculated and professional guidance to secure a successful financial future.
As part of their work to govern the conduct of professionals in the financial advice sector, the Financial Adviser Standards and Ethics Authority (FASEA) established mandatory educational and training requirements, developed an industry exam, and formed a code of ethics for all advisers to adhere to.
With these ongoing changes occurring, it’s important for advisers and licensees alike to make plans to meet critical deadlines. To continue to meet their obligations, licensees need to support advisers as best as they possibly can so they can be confident in their future.
As licensees, there are a number of key areas requiring attention, particularly regarding the mapping of advisers’ education pathways.
The new standards have broad implications for licensees’ training programs and plans for advisers. Helping advisers understand exactly what studies they are required to undertake to fulfil their FASEA requirements can help alleviate some of their anxiety associated with having to return to study, in some cases after decades.
It’s also possible that the new requirements for all advisers to have completed the FASEA industry exam by 31 December 2020 will create significant pressure for advisers. Licensees will need to develop or source training programs that help prepare their advisers for the exam, so advisers can focus on continuing to provide the best possible outcomes for their clients.
For example, as a licensee and through our dealer-to-dealer service, Affinia Access has partnered with an external academic institution to facilitate three specific FASEA exam preparation workshops, which will be held in addition to our existing 2019 training schedule. These sessions will be held in July, September and November, with a view to having all advisers in the Affinia community successfully through a first sitting of the exam by the end of this year.
By offering a FASEA exam preparation program, licensees’ current advisers can receive the support they need, and licensees can strengthen their value proposition for future recruits.
The FASEA code
As it stands, the introduction of the FASEA code on 1 January 2020 will see all licensees needing to be registered with a code body by the end of this year. Although this may change depending on the extent to which Commissioner Hayne’s recommendations will be implemented, the challenge for licensees will be ensuring their advice infrastructure is tested against the 12 standards under the code. Licensees and advisers will be subject to code audits that assess this in the future.
From an Affinia perspective, we’ve been working to update our advice handbook to include additional information that supports our advisers in navigating the code. Similarly, for our licensee partners in Affinia Access, we are working to update their white labelled AFSL infrastructure, which enables them to meet their code obligations.
Amidst the continual changes as we transition to Australia’s newest profession, Affinia has also developed a new graduate program, which is designed to support businesses that are new to or currently within Affinia to become self-licensed. This is a unique program that takes place over 18-24 months to enable those businesses with a desire to be self-licensed to make the transition in a seamless way. Once they are self-licensed, the businesses will have the full support of the Affinia Access dealer-to-dealer offering.
Building a quality advice industry together
Now more than ever, advisers need the support of their licensees. Licensees can add value by keeping abreast of the rapid changes occurring in our profession, so advisers can continue to be well-equipped to provide quality advice to Australians well into the future.
Marcus O’Sullivan is the Head of Affinia Financial Advisers and has previously held Executive positions within Retail Insurance Offices. He has been a part of the financial services industry for over 20 years and has worked in all aspects of financial services from Advice, Licensee Management, Technical Life Insurance, Distribution, Investment and Superannuation administration.