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.