FASEA releases Education Pathways and Code of Ethics consultation papers
20 March 2018
The Financial Adviser Standards and Ethics Authority (FASEA) has released two new consultation papers; Qualification Pathways for Existing Advisers and Code of Ethics.
The Proposed Guidance on Qualification Pathways for Existing Advisers clarifies the proposed educational pathways for Financial Advisers seeking to meet the new standards. Financial Advisers with a bachelor’s degree in a related field (accounting, financial planning or advice, business, commerce, law or economics) will need to complete a bridging course of three study units to meet these standards. This equates to less than one year of study if taken part-time.
Financial Advisers with a bachelor’s degree and a postgraduate qualification in a related field will only need to complete a one-unit bridging course covering the FASEA Code of Ethics.
All Financial Advisers with these types of degrees will be eligible for the relevant bridging course option, regardless of when they obtained their degree.
The Draft Code of Ethics is a principles-based code that establishes core values to guide ethical behaviour, client care, quality of process and professional commitment amongst Financial Advisers. This is a positive outcome and is something that CPA Australia had advocated for during the development of the new legislation.
All Financial Advisers will need to covered by an ASIC-approved compliance scheme that monitors and enforces compliance with the code of ethics from 1 January 2020.
CPA Australia will continue our discussions with relevant stakeholders about becoming an ASIC-approved compliance scheme. We look forward to the release by ASIC of its guidance on the framework for approving such schemes.
FASEA has also upgraded its website, providing more concise information and easy access for stakeholders to submit feedback relating to each standard.
CPA Australia will be holding member roundtables to discuss the proposals in detail and gather member feedback for our submissions. Details will be released late March.
In the interim, if you have any feedback or questions, email firstname.lastname@example.org
CPA Australia meets with FASEA
6 March 2018
CPA Australia recently met with Dr Deen Sanders, CEO of FASEA, on behalf of members to find out more about its approach to developing the professional standards framework for financial advisers.
CPA Australia highlighted the following concerns:
- the need for flexible transition pathways for existing Financial Advisers, including the recognition of qualifications in related disciplines
- how ‘equivalent’ qualifications may be recognised and accredited
- the development of the Code of Ethics and how it may interact with other existing Codes.
The key message from FASEA was not to be alarmed by what was previously proposed. It was designed as a first step in the conversation and there will be further changes and consultation, with the next phase of these proposals likely to be released soon.
FASEA also noted:
- that they would like to see these reforms have a positive impact both upon the financial planning sector and on the confidence of the general public in financial planning advice
- while the reforms will require all financial advisers to do something, this will vary depending on the financial advisers previous education and training
- they are mindful of the goal that successful consumer outcomes are more likely if requirements can deliver benefits to financial advice and are also culturally effective in influencing changes to behaviour.
CPA Australia will provide a further update and seek member input when FASEA issue the next consultation papers. In the interim, email email@example.com for further information.
Financial Adviser Standards and Ethics Authority
11 April 2018
A professional standards regime for financial advisers will commence from 1 January 2019. All Australian Financial Services (AFS) Licensees and their representatives and Limited AFS Licensees and their representatives will be required to comply.
The Corporations Amendment (Professional Standards of Financial Advisers) Act 2017 will establish:
- compulsory education requirements for both new and existing financial advisers
- supervision requirements for new advisers
- a code of ethics for the industry
- an exam that will represent a common benchmark across the industry
- an ongoing professional development component.
A Commonwealth standards setting body to govern the professional standing of the financial advice industry was established on 13 June 2017. FASEA will be responsible for setting the educational requirements, developing and setting the exam, and creating the uniform Code of Ethics.
The new professional standards requirements will commence on 1 January 2019. From this date, new advisers will be required to hold an appropriate degree before they can commence the supervision year and sit the exam.
Existing advisers will have until 1 January 2021 to pass the new exam and until 1 January 2024 to reach degree-equivalent status.
The Code of Ethics will commence on 1 January 2020.