05 September 2018
The SMSF Association has lodged a package of submissions to FASEA in July and August on their draft guidance issued on various matters.
A summary of our positions for your reference include:
Draft Guidance on the Financial Adviser Examination
We believe the examination should not be set at a level that causes damage to the industry by being irrelevant, overly complex and reassess advisers on knowledge covered by bridging courses or qualifications undertaken to meet the new education standards.
The exam should be designed to provide a nationally consistent minimum professional standard of education and competency for all financial advisers, regardless of whether they are new or experienced. The examination should be multiple choice and allow reference material where appropriate.
Draft Guidance on the Professional Year
The SMSF Association believes the Professional year should help to build on the education received by new entrants into the profession and ensure they are component to provide financial advice. However, we stress the final design of the Professional Year program should not be too burdensome for supervisors and potential new entrants as to place strain on resources or stifle their development.
We recommend that 1500 hours (500 of education and training) is used as benchmark for provisional financial advisers as this provides greater flexibility and practicality than currently proposed.
Draft Guidance on the Provisional Relevant Provider Term
We had no specific issues with the term ‘Provisional Financial Adviser’ being used to refer to a Provisional Relevant Provider and believe these terms should be used interchangeably.
Draft Guidance on Continuing Professional Development
We have concerns with the proposed requirement for 50 hours of CPD per year. We believe that 40 hours is an appropriate standard to ensure that financial advisers are adequately maintaining and extending their professional capabilities, knowledge and skills. 40 hours also provides a suitable basis for those financial advisers who are operating under a limited licence offering SMSF advice and is akin to the current standards of many professional associations such as ourselves.
We also strongly recommended that flexibility is ensured to allow for individuals to continue to meet their annual requirements over a three year period.
Draft Guidance on Foreign Qualifications
Noting that effective consultation on the foreign qualification standard is difficult without finalisation of the FASEA education standards, we recommended that ‘blanket rules’ are not applied to individuals which force them to take a post-graduate pathway or undergraduate pathway as experience and certain qualifications may deem these options inappropriate.
The SMSF Association will continue to consult with FASEA as further details are released. Further consultation on key issues such as how the education pathways will address the experience of existing qualified advisers, limited licensed accounts, related and unrelated degrees, and how the examination will interact with other elements of the new regime are essential to ensure that the final standards are appropriate for advisers and the community.
If you have any questions about our submissions please do not hesitate in contacting us via email at [email protected]