A proposal from the Financial Adviser Standards and Ethics Authority around continuing professional development is likely to lead to conflicts of interests between licensees and CPD providers, according to a professional industry body.
In its submission to FASEA, the SMSF Association said it understands its current proposal is for licensees to approve 70 per cent of an adviser’s CPD each year.
“From the association’s perspective, such a proposal raises legitimate concerns about the extra compliance burden on licensees, potential conflicts of interests between licensees and CPD providers, and incentives for advisers to ‘licensee shop’ for those with a less stringent CPD policy,” said SMSF Association chief executive John Maroney.
“In addition, the ability for licensees to also be CPD providers and approve their own CPD puts the independence of the system at risk.”
The SMSF Association suggested that CPD that is accredited or delivered by a professional association should automatically be approved by licensees.
It said FASEA should adopt this position on CPD to achieve “consistency, clarity and simplicity”.
“Having professional association’s CPD recognised as approved for FASEA CPD requirements will mean that the work being done by associations to provide accreditation for CPD material won’t have to be reworked by each individual licensee, a process that will inevitably lead to red tape and inconsistencies,” Mr Maroney said.
“It also ensures that an independent body is an integral part of the CPD process, which aims to maintain advisers’ knowledge standards and provide ongoing professional development, instead of relying wholly on licensees that may not have the resources or knowledge to appropriately approve CPD for their advisers.”
However, the SMSF Association said it fully supports FASEA’s decision to reduce annual CPD hours from 50 to 40, saying that 40 hours is “an appropriate standard to ensure that financial advisers are adequately maintaining and extending their professional capabilities, knowledge and skills”.
The Association of Financial Advisers noted in its submission that FASEA’s CPD policy was “unclear” and “absolutely unreasonable”.
“Put bluntly, this is an impossible proposition for over 2,200 advice licensees to implement, at this time of the year with only three weeks left before it is due to commence,” the AFA said.
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