The AFA has called out what it says are inconsistencies in FASEA’s approach towards recognition of prior learning applicable for existing advisers.
In the most recent policy update sent to its members last week, the Association referenced responses made by FASEA CEO, Stephen Glenfield, to a recent Senate Estimates hearing. His responses prompted the AFA to re-visit the original FASEA (Professional Standards) legislation and its Explanatory Memorandum notes to asses the extent to which FASEA’s current approach reflects what was originally set out.
The AFA’s findings reveal what it says are inconsistencies with the original legislation and accompanying explanations. AFA GM, Poilicy and Professionalism, Phil Anderson, provided his members with seven case study scenarios contained within Chapter 6 of the 2016 Explanatory Memorandum as examples of these inconsistencies. Taken from the member update, these examples include:
EM Example 6.3: Appropriate bridging courses
“Anastasia has been working as a relevant provider for over 20 years. She has a bachelor degree in engineering and an advanced diploma in Financial Planning. She has also completed several CPD courses throughout her career.
The body decides that an engineering degree does not meet the degree standard set for new financial advisers in the new section 921B. When determining whether Anastasia needs to undertake a bridging course, the body may take into account all of the courses that she has already completed (that is, her bachelor degree in engineering, her advanced diploma and the CPD courses).
The body may not take into account the fact that Anastasia has been in the industry for 20 years. The body may decide that the mathematics units in Anastasia’s bachelor degree, together with her advanced diploma and CPD courses, give her knowledge and skills equivalent to the standard. In this case, Anastasia would not need to undertake any further study.”
What FASEA have done – A financial adviser with an engineering degree would get one credit, whilst they would also get two credits for an Advanced Diploma of Financial Planning. With no credits for CPD, this means that the adviser would only get a total of three credits and be required to complete a further five subjects as part of a Graduate Diploma. This is very different from the prospect mentioned in Example 6.3, that the adviser would not be required to do any further study.
…FASEA have set substantial additional education obligations for financial advisers with a relevant degree
EM Example 6.5:
“Hamish is an existing provider with a relevant degree. Hamish wants to continue to give personal advice on relevant financial products to retail clients after 1 January 2024. As he has a degree, he can also continue to give advice after 1 January 2024.”
What FASEA have done – An adviser with a relevant degree, as defined by FASEA, would get four credits and would need to complete four bridging course subjects as opposed to no further study.
Comparing these and other case study examples in Chapter Six of the 2016 Explanatory Memorandum with FASEA’s responses made to the recent Senate Estimates Committee hearings has led the Association to conclude this “…clearly demonstrates that FASEA have set substantial additional education obligations for financial advisers with a relevant degree, and are expecting the completion of a Graduate Diploma, rather than the suggested bridging courses (for advisers without a relevant degree) and are not recognising many older Diploma level courses or any Continuing Professional Development as specifically referred to in the Explanatory Memorandum.