The FPA has revealed its proposed plan for exactly how existing advisers should transition to the new education requirements, including details on what should be included in the industry exam and what constitutes a “degree equivalent”.
In February, the Professional Standards of Financial Advisers Bill 2016 passed the Senate and mandated that all existing financial advisers must pass an exam by 2021 and have a minimum degree qualification, by 2024.
Speaking at the FPA Roadshow last Friday, chief executive Dante De Gori noted that while the new bill sets down a framework for professional standards requirements, advisers are demanding more details on how it will work.
Consequently, the FPA has released its own proposal to put to the newly-formed Financial Adviser Standards and Ethics Authority – a government elected policy team responsible for implementing the new education requirements.
The FPA has proposed a points system whereby 100 points means the adviser meets the new qualification requirement.
Individual units of study (individual subjects) that are offered within an overall qualification, certification or designation are each worth a certain amount of points, while CPD points will also count in achieving the 100 mark, the FPA has suggested.
For example, any qualification including or above a bachelor degree that is relevant to financial planning would easily meet the new professional standards requirements.
Lower level degrees such as an advanced diploma, associate degree, diploma or certificate would count for a certain number of points. CPD points should also go towards achieving the new “degree equivalent” standard, with some further units of study that might be required for advisers, the FPA said.
“We argue that experience needs to be considered, so we have included CPD as part of this 100 point framework. However CPD alone can’t take you to a ‘degree equivalent’ standard – but we’ve capped it. You’re required to keep seven years of CPD records and we’ve allocated two points per year of CPD meaning that it’s effectively capped at 14,” Mr De Gori said.
“The diploma and advanced diploma with CPD points would still fall short of 100 points meaning there would be further study needed,” Mr De Gori said.
“If this new body (FASEA) does agree with this concept in theory what we can do is work back with the education providers and see what courses or how many units of study you can complete in order to take it to 100 points.”
For the exam, the FPA proposed that the main areas of focus should be: compliance with Chapter 7 of the Corporations Act 2001, Tax Agent Services Act 2009, Anti-Money Laundering and Counter-Terrorism Financing Act 2006, common law fiduciary duties and ethics.
A significant majority of the 200-plus attendees who voted at the FPA Roadshow strongly agreed with the FPAs proposed plan, while about four per cent disagreed.
Mr De Gori said that with the support from advisers, licensees and other stakeholders, he is confident that FASEA would accept the concept with possible changes to the details.
SUBSCRIBE TO THE IFA DAILY BULLETIN
12 Dec 2017AZNGA acquires Henderson MaxwellBy Aleks Vickovich
12 Dec 2017Zurich-ANZ deal shows ‘commitment to advice’By Staff Reporter
11 Dec 2017Insurance engagement driven by advisersBy Jessica Yun
11 Dec 2017Kaplan pushes for new CPD regimeBy Staff Reporter
11 Dec 2017AAT upholds adviser ban after successful appealBy Killian Plastow
11 Dec 2017Senate approves AFCA billBy Annie Kane
- view all