MEDIA RELEASE:

FASEA releases Standards Blueprint

The Financial Adviser Standards and Ethics Authority (FASEA) has today released details of its revised standards framework for financial advisers following stakeholder consultation.

Approximately 800 submissions were received during the consultation process. FASEA has taken time to listen, analyse and reflect on those submissions in reviewing each standard.

While consultation feedback supported much of the original content, this feedback provided FASEA with the opportunity to make the following changes:

Education Pathways

New Entrants

FASEA will add a Post Graduate Career Changer pathway requiring an approved Graduate Diploma. New entrants will be able to seek Recognition of Prior Learning (RPL) from the education provider as per their credit and RPL guidelines.

Existing Advisers

FASEA will further define RPL for Existing Advisers and provide guidance on credits for previous course work undertaken. The Advanced Diploma of Financial Planning (ADFP) will be eligible for two course credits.

Further guidance will be given on course work undertaken to attain an industry designation (for example the FPA’s 5 unit Certified Financial Planner designation or the AFA’s Fellow Chartered Financial Planner designation after 2014) and the approval process so that holders of these can be eligible for two course credits.

The Related Degree definition has been revised and advisers will be able to undertake an AQF8 Graduate Diploma once approved by FASEA.

Advisers will be able to seek RPL for the Corporations Act and Behavioural Finance Client and Consumer Behaviour bridging courses. There will be no RPL available for the newly created Code of Ethics bridging course. FASEA will also revise the Corporations Act unit to include other legal obligations such as Anti-Money Laundering, Privacy Act 1988 and Tax Practitioners Board requirements.

Exam

FASEA has merged the curriculum for the Financial Adviser Examination into 3 modules and will focus on applied knowledge acquired in actual financial advice scenarios, testing the following competency areas:

Corporations Act (emphasis on Chapter 7 – Financial services and markets)

Financial Advice Construction – suitability of advice aligned to different consumer groups, incorporating consumer behaviour and decision making

Applied ethical and professional reasoning and communication – incorporating FASEA Code of Ethics and Code Monitoring Bodies

The duration of the exam has been set at 3.5 hours including reading time. The exam will consist of multiple choice and written response questions and will be open book for statutory materials. FASEA will publish a curriculum framework, recommended reading lists and a practice exam.

CPD

FASEA has reduced the number of CPD hours advisers are required to complete from 50 to 40 hours each CPD year (including a maximum 4 hours of professional reading), of which 70% will need to be approved by the licensee. FASEA has defined minimum hours for CPD categories as follows: Technical – 5 hours, Client Care and Practice – 5 hours, Regulatory Compliance and Consumer Protection – 5 hours, Professionalism and Ethics – 9 hours, with the balance up to 40 hours consisting of qualifying CPD.

Transition arrangements for 2019 will be on a pro-rata basis for licensees whose CPD year is not a calendar year.

Code of Ethics

FASEA Code of Ethics addresses the values of Trust, Competence, Honesty, Fairness and Diligence. The 12 standards have been revised to provide greater clarity of what is always expected of an adviser to act , in all cases, in a manner that is demonstrably consistent with the law.

Case studies have also been included in the Code of Ethics explanatory statement to provide additional guidance for key stakeholders.

Foreign Qualifications

FASEA will now recognise advisers who have had their assessments already assessed by Department of Education and Training (DET) approved bodies such as CAANZ and CPA. FASEA will undertake assessment for a fee of foreign qualifications to determine the relevant pathway to meet FASEA’s education standard as part of FASEA’s degree assessment service.

A precedent database of approved foreign qualifications will be displayed and updated on FASEA’s website.

Provisional Relevant Provider Expression

While most submissions received supported the expression “Provisional Financial Adviser”, FASEA has added an alternative expression “Provisional Financial Planner” to be used interchangeably with “Provisional Financial Adviser”.

FASEA Chief Executive Stephen Glenfield said incorporating stakeholder feedback received was important in finalising the standards.

“The detailed consultation input was valuable to FASEA in creating standards which address industry and consumer needs while at the same time balancing FASEA’s legislative obligations,” Mr Glenfield said.

“Industry and consumer feedback has helped to create a balanced set of standards that, taken as a whole, offer a workable framework for how the industry will evolve into the future – for the benefit of both advisers and consumers.”

Legislative instruments are progressively being released for each of the standards which will be available for consultation for varying periods up to four weeks. FASEA will then review feedback received and finalise the standards.

The standards summary can be viewed here.

ENDS