The FASEA board “rushed out” its initial guidance and will be open to making changes following the consultation period, including potentially abolishing the '10-year rule', says a financial planning academic.
Speaking to ifa, Deakin University associate professor Adrian Raftery – who is not a FASEA board member but is co-chair of the Financial Planning Academics Forum – said he expects his peers on the board to be taking the consultation process seriously.
“I’m very confident there will be changes,” Dr Raftery said. “I’d be very surprised if what we saw in December was still in place post-consultation.”
The academic said he suspects the board “rushed out” the guidance before Christmas in response to critics in the media and financial services industry and was planning to use the consultation process to further develop its long-term position.
“If they had their time again, they might have taken their time, had a few more people look at it,” Dr Raftery said.
In particular, Dr Raftery expects FASEA’s so-called 10-year rule – which specifies that degrees not completed within the last decade will not be recognised and has been a major source of distress for many existing advisers – to be abolished post-consultation.
“[The] 10-year rule is going to be a huge impost,” he said, adding that it remains unclear the date at which the 10 years is measured from and that it was likely not an intentional inclusion.
“My belief is that where it came from is that universities across the board have an acknowledgement that 10 years is usually the cut off used for credits for prior learning. It is a commonly used [standard] in education [and was] inadvertently placed in this guidance. I think it’s one of the first things that would go.”
Dr Raftery refuted the suggestion that the 10-year rule may have been more deliberate and hit back at claims the FASEA board is plagued by conflicts of interest.
“I strongly disagree that the ‘conflicts of interest’ argument is valid,” he said. “There might be a perceived conflict, but not actual.”
In addition, Dr Raftery praised the appointment of FASEA CEO Deen Sanders – likening it to the recruitment of AFL legend Kevin Sheedy to coach the GWS Giants – and said that FASEA board member Mark Brimble is also a smart choice for the board.
“The way I know the FASEA board, they couldn’t do a better job in terms of handling conflicts of interest,” he said. “You couldn’t ask for more transparent. I would say their persoanlities would be quiet open to listening to recommendations.”
Dr Raftery encouraged advisers to make a submission to the consultation process.
Industry frustration over a lack of consultation and communication from the board is warranted but ultimately due to lack of resources, he said.
“[FASEA] is not much more than a one man band,” Dr Raftery said. “If [Mr Sanders] had a hundred staff there would be much more activity.”
He anticipated that FASEA would be making more announcements in coming weeks.
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