The Government has confirmed it will introduce changes into Parliament that will extend the time-frames for advisers to undertake the FASEA exam and complete its new minimum education standards.
Under the new requirements, advisers who were registered on the Financial Adviser Register on 1 January 2019 will be required to:
- Complete the FASEA-approved exam by 1 January 2022
- Meet FASEA’s minimum qualification requirements by 1 January 2026
Previously, advisers were only given until 1 January 2021 to pass the exam and until 1 January 2024 to meet the minimum education standards. This means advisers have one extra year to pass the exam and two extra years to complete their required studies.
In a statement released by Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume, which coincided with the final afternoon of the 2019 AFA Conference in Adelaide, the Senator reiterated her Government’s dedication to raising the education, training and ethical standards of financial advisers via FASEA.
In making these changes, however, Senator Hume conceded the need to balance the impact of these reforms against maintaining the ongoing availability, quality and affordability of advice:
…the Government intends to legislate to provide additional time
“Therefore, the Government intends to legislate to provide additional time for existing advisers to meet new qualification and examination requirements set by FASEA,” she said.
Senator Hume’s statement clarified that the extension of the exam will ensure that all advisers, including rural and regional advisers, will have two years to sit the exam “…as originally intended.”
She added that the extension of the qualification requirements will assist working parents, including those taking parental leave during the transition period, to have sufficient time to meet the requirements, thereby maintaining a diverse adviser industry.
Senator Hume addressed the AFA Conference earlier in the week, at which time it was anticipated she may make a statement regarding the extensions, which had been called for by both the AFA and FPA.
Delegates, however, were given news of the time extensions at the final plenary session of the Conference, and appeared to respond positively to the additional breathing space that is to be legislated.
Well that’s finally a step in the right direction but while we are on a run let’s sort out the ridiculous structure of the exams that do not take into account advisers both long and short term who want to provide specialist risk advice to clients like a GP might and should their needs be greater then there area of expertise refer them into a specialist in the area of need Super aged care pension DSS etc
One individual regardless of their education standards cannot be everything to everyone. Just staying on top of one speciality is difficult enough
And for heavens sake somehow ? fix this ridiculous idea that only the ignorant have that being paid commission is somehow “evil”
Get back to some form off acceptable renumeration and responsibility periods for advisers 80/20 and one year so we can afford to keep staff and help as many clients that need us at a fair cost to all concerned
Companies losing money ( 1 billion in IP alone) is not the advisers fault
It’s time the companies had a real close look at themselves their underwriting and the people they decline that are genuine and prepared to pay a premium and “wear” exclusions rather than a flat out decline
We are not all 25 year old marathon runners that don’t drink or smoke
The extension is a good start but it’s only putting a plug in the bath unless the rest of this ridiculous act is reformed and quick
My original plan pre-FASEA was to retire/sell near to age 65 at the end of 2021. Late 2018 my plan was thrown into in disarray. I spent the next 6 months stressing over my options. Finally, mid this year, I made the difficult decision to offer my 30 year old client base for sale. Now all of a sudden out of the blue comes this!!! Does any person in FASEA, ASIC or government have any possible understanding or a modicum of empathy for what they have put long standing risk insurance advisers through? Of course not! I wonder what will be next? Sudden change to allow 30+ year risk advisers ‘experience credits’ so they don’t have to endure the onerous 90% FP based exam process by 31/12/2021? Who knows, I certainly don’t!
Well said Squeaky. In point of fact I haven’t yet entered into any formal sale arrangement and am now looking at continuing until the end of 2021 – being my original plan. I’d love to think a $250k recurring ‘risk only’ book would attract 3.5x [average client age mid 40s]. But I am definitely NOT seeing that at the moment. So far 2.5x has been the best multiple achieved on a book around my size. I’m part of a large non-institutional owned AFSL that has been advertising some AR books. A $million+ recurring income book went for 3x. But anything at or below $250k has gone for less than 2.5x. Perhaps with the retention of the coalition government and some renewed confidence in risk commissions beyond 2021, the multiples might rise, even with the FASEA exam required to be done by 31/12/2021.
The Assistant Minister’s statement at the AFA Conference was in essence that the Government would not change its mind. The debate was over and dead….move on. The finality of the decision was echoed by the AFA’s downcast response immediately following Humes’s edict. They knew that they had lost the battle.
The change of mind had another cause and it was not the result of the ‘masterful efforts’ of all those puffing out their chests after the about-face statement on Friday.
Look at the events. Resurrection from the dead in 48 hours. This was not the result of submission after submission.
So @gruntled what do you put the ministers change of position down to?
When told of the reason for the changed decision I was asked not to divulge it. Hence I haven’t. ‘Old Risky’ has correctly divulged what happened.
VERY well said Old Risky – thank you for saying clearly what needs to be said. I agree in every point made. Each point is significant. I haven’t written new business in well over 2 years – too risky now. Not that I’m trying to hide anything but I’m stressed enough with this idiocy currently than to take on the risk of a clawback any time, any reason within the next 2 tears. If I sell my client base soon I simply don’t want extended clawback risk lingering over it. Thank God my renewals are more than adequate to support me and my family until I can get OUT.
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The new announcement in this article is little help to someone like me. I do hope it helps some advisers though. Incidentally, I have to make special mention of one thing you said, I LOVE it: “What about risk only advisers-why do we need bits of paper for stuff we don’t use in our advice. And what about LIF and the ludicrous 2 year clawback.” . . . and this gem too:
. “Will insurers EVER find the balls to tell Govt that mangled risk commissions, combined with a two year clawback, means most risk advisers are wary of taking on new risk-only clients without collecting a fee, and we all know that will not work for most new clients.” Great words, thanks again mate!
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