It is hoped the new Financial Services Minister, Senator Jane Hume, will announce an extension to the FASEA exam deadline when she speaks at the AFA Conference in Adelaide today. Both the FPA and AFA have recently been lobbying to extend the deadline, and in a speech to the Financial Services Council (FSC) yesterday, Senator Hume said “The Government is listening to your concerns and is carefully considering how to proceed”.
Senator Hume wasappointed to the recreated role 3 months ago, with the portfolio previously being scrapped in a cabinet re-shuffle following the elevation of Scott Morrision to PM last August.
Hume, who in her maiden speech described herself as a political outsider, worked as a Senior Policy adviser at Australian Super after starting her career as a private banker and investment researcher at National Australia Bank before moving on to business development and senior leadership roles at Rothschild Asset Management and Deutsche Bank during her 20 year career. Hume said she entered parliament as a “realist, a pragmatist and a workhorse.”
We would hope that these traits could point to a favourable “common sense” outcome that many advisers are hoping for regarding a potential extension to the deadline for completing the FASEA exam. Both the FPA and AFA have recently been lobbying to extend the deadline, citing the fact that the former Minister responsible, Kelly O’Dwyer had previously said existing advisers will have two years to pass the exam, in a statement which recognised “existing advisers may need to complete the education requirements on a part-time basis while continuing to service their existing clients”. Since then, FASEA has pushed out the start of the exam period from January this year to June, but did not amend the deadline date to finish. The current timeline extends only for 18 months from the first FASEA exam, until 31 December 2020.
In their communications to the ministry, the FPA cited the following reasons it said would justify an extension:
- The first exam sitting was only held in June 2019 and was only available in capital cities. Financial planners in regional areas will have to wait until 2020 for the exam to be available in their area through digital delivery.
- It will take between six and eight weeks to get the results of the exam, meaning planners will not be able to rely on sitting the exam after October 2020, as they will not receive the results before the deadline.
- The Code of Ethics, which is a key subject of the exam, was released in February 2019. FASEA has yet to release a promised guidance document on how it will apply in practice. Bridging courses on the Code of Ethics won’t be available until late 2019.
In her speech to the FSC yesterday, Hume reiterated that the Government recognised that many advisers needed to balance work, study and family commitments.
Both the FPA and AFA have argued that an extension between 6 and twelve months would be appropriate, making the deadline for existing adviser to complete the exam either June 30 or December 30, 2021. FPA Chief Dante De Gori explained that from a “common sense perspective”, extending the deadline would not amount to “watering down” the exam or delaying the standards because the entirety of the education mandate (at present) requires advisers to be qualified by January, 2024. The FPA has also asked the government to extend the deadline for meeting the FASEA education standard by 24 months to 1 January 2026.
It should be noted that any move by the Government to alter FASEA time-frames would require amendments to the legislation underlying FASEA and this would need to be approved in both houses of Parliament. Would there be anyone in Parliament who would be against an extension should one be offered? We’ll have to wait and see. First things first – let’s see if the Senator offers up any concessions in her AFA address this afternoon.
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