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.
FASEA from day one, was a conflicted organisation, with conflicted instructions and many in this insidious Education courses flogger, have a vested interest, to force advisers to do irrelevant studies at a huge cost and time impost.
The Life Insurance Industry is struggling and thousands of risk advisers are going to exit the Industry due to FASEA and the LIF strangle hold, that has put all the responsibility on advisers and nil on Life Companies.
Advisers are not going to abide by outrageous demands and will leave the Industry.
Unless there is a total rethink on this whole LIF and FASEA fiasco, there will be probably be Class actions in the future that will drag down the Government, the vested Interest groups and the Big players who instigated this disgraceful course of action.
The fact that CPD/seniority in the field count for basically nothing under FASEA is ridiculous. The heads of every financial services education provider who’ve lobbied for further formal qualifications themselves have nothing but theoretical “experience” which at the end of the day is useless theory. The practicalities of the industry and job are worth far more than the pieces of paper that the likes of Kaplan or the Universities hand out. And as they say – those who can’t, teach
I won’t be doing any “mandated” additional education, and looking at the ridiculous requirements of the so-called Code of Ethics, I won’t be taking much notice of that either. What I will be doing is continuing to give my clients the professional advice and service they have come to expect over the years. I can’t believe there are so many people with no understanding of the way a financial adviser goes about bringing positive change to his/her clients, who now have their grubby fingers in the pie. I can’t believe the level of conflict that exists in FASEA. PLEASE, won’t someone get rid of them before it’s too late for everyone.
Well said Sue. I’ve said it before in past editions of RiskInfo and I’ll say it again – the only way (as I see it) out of this mess is for the retail life insurers, the AFA, the FPA and even the heads of the licensees, to go to the govt collectively and make them understand what has happened and what needs to happen – i.e. reinstste comissions, get rid of this evil 2 year clawback, and rid the industry of FASEA. It’s OK for some to say advisers must see their local MP’s and some are doing this, but it seems to be having little impact. The bodies I’ve mentioned must go to the govt as one united body, representing the entire retail life industry.
Sue and ‘Concerned’, I couldn’t have said it better. I concur with every word you both wrote – well stated!
I agree completely. FASEA does not recognise experience or previous compliance history. The Advance Diploma FP should be enough. I won’t redo a re-badged course just to have a Grad Dip certificate after 19 years experience as a senior FP giving wholistic FP advice to many clients. FASEA should consider workshopping us across the line if anything. No pressure, just a review and workshop week on each topic. The pressure of assignments and exams are what’s hurting the experienced planners. FASEA should take that pressure away and keep experience in the game. Many will leave.
Funny that. I can advise clients now but with another 4 years experience I cannot after 01/01/2024 or 2026??
Rob, I completely understand mate and completely agree. Many experienced advisers have already left. And with another 4 years under my belt, I wont be able to either unless I undertake further study. Will I be a better adviser and know more about my clients….. does an adviser with that education know more about financial planning and helping peoples than I have learned in 15 years? According to FASEA, they do. No compensation for experience, compliance, CPD points etc…. We are one month away from some binding standards that supersede the law that contradict themselves and there’s still stuff up in the air. Just crazy mate…. .I could do with a coffee….
Most of the problems in the financial services industry, doesn’t come from a lack of knowledge, but from a lack of integrity, or so it appears to me.
Obviously, we all undertake ongoing education through the likes of Kaplan, but will anyone better advise their clients, just because they have completed this degree course? Particularly advisers that have been advising for 30 plus years.
If the problem is caused by ‘integrity’, wouldn’t a psychological type evaluation of all participants in financial services, be a better option for the regulators than further education? Anyways, politicians always know best.
Those politicians (mostly unqualified to do their job – not in our best interest!) are the ones who need the psychology exam. I’m not being funny – it is true – all they are interested in is keeping their jobs, paid by us and getting re-elected. Sickening.
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