The Financial Adviser Standards and Ethics Authority has been taken to task regarding how its professional requirements have ignored advisers with significant prior experience and learning.
When the education standards body faced the Senate economics committee last week, Liberal senator Amanda Stoker cited the examples of three advisers who are older members of the advice profession to FASEA chief executive Stephen Glenfield.
“Paul Franklin is 72 and he wants to continue to practice for another eight years. He's been told he needs to do a full eight-unit diploma to continue. James Forde is 64. He would be required to do the full eight-subject graduate diploma. And Wayne Leggett is 64, has a bachelor's degree and an eight-subject diploma of financial planning and would need to do five subjects,” Ms Stoker told Mr Glenfield.
Ms Stoker then pointed out all three advisers have over 30 years’ experience in the industry before asking Mr Glenfield how FASEA’s current professional requirements relate to the three advisers.
“Can I suggest that the approach that is being adopted by FASEA is not sufficiently recognising the service, experience and prior learning of people who are at the upper end of the profession?” Ms Stoker asked.
“I would only respond that the legislation requires, as part of the lifting of the standards that it was aiming to achieve, that advisers reach a bachelor or higher level of education,” Mr Glenfield responded.
Ms Stoker also criticised Mr Glenfield for FASEA’s lack of consultation around the final version of the standard, which she noted was different to the draft standard three provided in November 2018.
The draft standard three states: "You must not advise, refer or act in any other manner if you would deprive an appropriate personal reason for doing so."
On the other hand, the final version states: "You must not advise, refer or act in any other manner where you have a conflict of interest or duty."
“Did FASEA consult with ASIC on standard three and, if so, what did they say?” asked Ms Stoker.
“No. FASEA conducted a broad consultation on the code of ethics and received large numbers of consultation around standard three, many of which were requesting a better clarity of the words for what was intended by standard three, and FASEA settled on the wording as it appears in the standard now,” Mr Glenfield said.
“Can you see that the second version is completely impractical?” asked Ms Stoker.
“It's not. We don't believe it is,” Mr Glenfield replied.
Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.
You can contact him on [email protected].
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