Last Friday the Financial Adviser Standards and Ethics Authority (FASEA), released a revised standards framework regarding the new education and ethical standards that will apply to existing financial advisers. It provides a summary of the key parameters for each of the Standards which will be reflected in the forthcoming legislation.
FASEA were criticised in the AFR for releasing draft legislation with only six weeks before the new laws are meant to be enforced, and allowing experts just 10 working days to give any feedback on the majority of the components. FASEA said the summary resulted from assessing over 800 submissions, but many industry experts who made submissions said they had not received acknowledgement or even a receipt for their comments.
The legislation sets out seven components for this professional standards framework (s921U(2) of the Act):
- Approve bachelor or higher degrees, or equivalent qualifications
- Approve an exam
- Set requirements for work and training (Professional Year)
- Set requirements for continuing professional development (CPD)
- Specify a word or expression to refer to a professional relevant provider (PRP expression)
- Make a Code of Ethics
- Respond to applications for approval of foreign qualifications
The next few weeks will see FASEA release the legislative instruments for each of these standards, with the previously mentioned short consultation period (2-4 weeks) for each legislative instrument, before announcing the finalisation of each.
In news that is sure to incur the ire of many FPA and AFA members, the summary states that the FPA's Certified Financial Planner (CFP) designation and the AFA's Fellow Chartered Financial Planner (FChFP) designation will count for only two credits worth of recognised prior learning (RPL).
Additionally, CFP holders who attained the designation before 2007 and FChFP holders who got their accreditation before 2014 will not receive the two units of RPL.
Speaking at the Financial Planning Academics Forum in Sydney, FASEA board member Mark Brimble said the summary released so far was only “the first set of the next version of the standards”, and that “remaining sets of documents” would be released according to a timetable in the guidelines.
However, with regard to qualifications, Brimble said “For existing advisers, the pathway is mapped out…we’re, in effect sticking with the regime of no degree, non-relevant degree, relevant degree and approved degree.”
We encourage advisers who are yet to view the 14 page summary document, to do so here.
Article by:
Comments11
"Where's the ethics FPA in letting a 'celebrity' adviser continue to practice after the complaints were made? - the Royal Comm embarassed and scarred the CFP then. Where does ethics and conflicts of interest draw the line on discounting the membership fees to large licencees? I guess its another back hand deal to hae the big licencees make it mandatory to join FPA....yet completely act unethical (apologies to the MAJORITY of advisers who dont - but the culture is forced upon them) Get a Masters - no one can downgrade that qualification "
NO CFP for ME 16:28 on 26 Nov 18
"Craig, while I understand your view, you did not seem to follow my points. Firstly, I have clearly said I have no problem with completing further education. Second, FASEA is about addressing a perceived deficiency in ethics within the advice profession. Ethics is not what you learn from a book - it is your actions. An unethical person may quite competently pass an ethics unit - yet never act ethically in their life but forever be finding ways to circumvent the rules. An ethical person doesn't need the 'book' - they just do the right thing. Third, the FPA has always promoted that a CFP has the highest ethical standards - without any reference to date of CFP. To now say that the date of my CFP makes me unethical, without knowing anything about me or how I practise, is a gross insult. Your reference to doctors and their high education accomplishments is also a fallacy. Their education and ethics require them to keep their hands off their patients - yet almost every week, just here in Australia, we see media reports of various medical professionals hauled in front of their ethics committee's (or the Courts) for crossing those ethical boundaries. So a high education is no guarantee. And lets not forget examples such as ENRON - the smartest guys in the room with more collective education than the Pope makes votives to God - couldn't lie straight in bed. And this is just a very simple example of a field absolutely replete with incredibly well educated (with ethics components) people that paid no mind at all to their vaunted learning. Lastly, if my 'highest ethical standards' CFP status is not even good enough to get a lousy 2 RPL credits because of the date it was achieved, then I will hand back that CFP. I don't need it and I don't want it. It clearly HAS NO VALUE; even your own argument is that it is worthless."
Andrew 09:59 on 22 Nov 18
"Hi BM and Andrew, CFP was a handed to you up to 2002 if you had a 8 unit DFP and two years experience. Please all remember the key point with CFP, it is a designation, not an education standard, i.e. its a trademark like AMG is to Mercedes. it was basically a revenue raise for the FPA. I have 16 years experience and am nearly completed my masters as i knew it would always come to that. I can tell you without a doubt CPD is not worth much unless you think attending a product flogging breakfast or lunch is worth while. I would be very surprised if any adviser with years of experience and an Adv Dip would say that they would not learn anything doing a masters. You realise very quick studying that there is a massive difference to years experience with a DFP and formal higher studies, i.e. masters or Grad Dip, for one they are not open book exams:). I fully support the changes, it will put us in a professional standing, do you know any doctors who have minimal study but experience? would you trust them over one with a 6 year medical degree plus years of experience and CPD? (it take 6 years of experience after med school plus lots of formal studies to become a GP, remember that next time you see your GP) It's a non-question if you want to be seen as a professional, or would you rather be seen as a hairdresser?"
Craig 20:16 on 21 Nov 18
"FASEA is about ethical standards. If I gained my CFP in 2008 I can keep practising because I must be ethical. If I gained my CFP in 2007 (for the sake of example lets say the day before the cut-off) then I am not an ethical CFP. All for one day either side of the cut-off? Nothing about if I am consistently and always ethical in my client dealings? Nothing about whether or not I am competent at my job? My professional standards and ethics are determined by a single DAY? What has that got to do with education, standards or ethics? Any date could have been picked. Does that mean that every male born after the start of the #metoo movement is forever free of potential guilt? Or that every male born before that date is Weinstein? Get real."
Min 19:23 on 21 Nov 18
"BM, I am not sure that they ever just 'handed out CFP status' - but even if they did do that a long time ago (and they didn't for me) it has no bearing on what a CFP is and does; or on what the FASEA education standards are trying to achieve. For quite a few years now the FPA Legs & Regs relating to the maintenance of an individuals CFPS status have made no distinction between a pre-2007 or post -2007 achievement. And nor should they: you are either a CFP or not. You meet the necessary requirements or you don't. The FPA has made much out of the professionalism & ethics of a CFP - EXCEPT now. Why was I lauded as a professional, ethical CFP yesterday but today I am not even worthy of a couple of RPL credits? FASEA is primarily about ETHICS, and that can never be taught in a classroom (or online learning). It is something that comes from within the individual. "
Andrew 18:04 on 21 Nov 18
"I think these educations standards are great news. From what I have heard in the industry, they use to "hand out" CFP's which makes it unfair for newly achieved designations that have gone through the current extensive education and examination requirements. I think this is finally being recognised by FASEA and I think they should go one step further and separate the designations to identify the difference. Experience in the industry is great but not everything. Neither is education, however education demonstrates commitment. If anything, those with experience should have no problem completing the education requirements. I believe these education requirements are only going to strengthen our industry so I don't see the issue. - I currently do not meet the education standards but have no problem with the guidelines set out and I will still pursue the designation of CFP."
BM 16:18 on 21 Nov 18
"Compare the Pair. As I understand it: 1. I could have a non-related Masters, having completed DFP (4 subjects), ADFP (4 subjects), and CFP Certification (5 subjects). Under FASEA, I still need to complete another 4 subjects to get to a Graduate Diploma (total 17 subjects). OR 2. I could have a non-related Masters, having completed a Graduate Certificate in FP or similar (4 subjects) followed by a Graduate Diploma (4 subjects), in which case under FASEA, I only need 1 more subject (total 9 subjects). Being mindful we made the best decisions we could (which cost time and money) before FASEA was even a twinkling in someone's eye. Go figure. What a lottery. "
Rob 15:54 on 21 Nov 18
"Bravo Andrew - I concur with everything you have said. As a fellow pre-2007 CFP (since 2000) and DipFP with more than 20 years constant experience and who is up to date with CPD's, it's disappointing to realise our past efforts at maintaining the highest professional standard will no longer be recognised. I also will choose not to pay a fee to hold a designation that is seemingly worthless."
Tracey 14:37 on 21 Nov 18
"I think the important thing to note with the FPA and AFA designations is that to retain them the holder must keep paying a membership fee. The diplomas, advanced diplomas etc are retained. "
Nigel 14:24 on 21 Nov 18
"Even though the regime starts on Jan 1, 2019 - for existing advisers the final requirements may actually be months, if not years ago, seeing as they don't take effect till 2024. Is this a fair assumption??"
David S 14:18 on 21 Nov 18
"I am either a CFP or I am not. The FPA's own website says that (with respect to the CFP): The CFP® designation is fast becoming the first choice for clients and employers – and it’s easy to see why. The highest designation in financial planning, coupled with commitment to the highest ethical standards, sets CFP® professionals apart from the rest. So CFP's are the highest designation and with the highest ethical standards But disappointingly I have never seen any published material to the effect that there are actually multiple levels of CFP, some of which must be of a lesser quality (after all it doesn’t qualify for even 2 lousy RPL credits – so I must be of a really sub-standard CFP quality). It seems that, as my designation was achieved pre-2007, my CFP status is second class. I also have never seen anything suggesting that the ongoing membership fees; or CPD & education requirement requirements; or ethical rules; or ANY other things - are different for these post-2007 ubermensch CFP’s. Rather, it seems that a CFP is a CFP is a CFP in everything EXCEPT this issue. After starting in this profession back in the early 1990’s, I finished the DipFP & CFP early 2000's, had to do 8 units and from memory DFP8 was the CFP unit (it was nearly 20 years ago). But that apparently has no present value. To be clear, I have no problem with completing further education; whether that be a Grad Dip, a Bachelors or even a Masters. Certainly I would have hoped that a person having been in the profession for nearly 26 years - DipFP, CFP; in constant practise all of that time; up to date with all CPD’s etc – would have been granted SOME kind of RPL: but it is what it is. Everyone, including the FPA, appear to be of the opinion that the DipFP & CFP are not personal achievements as such (despite the need for maintaining your PERSONAL education), but rather something that is conferred upon you simply (and only) by virtue of paying the fee to the association. So the only benefit I get from paying the fee is to be allowed to pay the fee – I am not a REAL CFP. So, if there is no value placed on my pre-2007 CFP status, I may as well not be a CFP. Certainly I have no interest in being a CFP if that designation has no value, even by its own authorising body. And if my own professional body does not see merit (other than the fee it receives from me) in my CFP accreditation then why should I see merit in that body? I certainly will not pay a fee to be a second class citizen in my own professional organisation."
Andrew 14:09 on 21 Nov 18