FASEA draft legislation ‘overlooks’ limited licence regime

The Financial Adviser Standards and Ethics Authority’s (FASEA) draft legislation for educational standards fails to “appropriately recognise or account for” the limited licence advice regime, particularly for accountants with a licence providing SMSF advice.

The SMSF Association, in its 12-page submission to FASEA, says this means that the Authority has effectively given existing accountants only until the end of this year to consider applying for a limited licence or authorised representative status.

“We believe the education standards that advisers with a limited licence must comply with should adequately represent the advice that they provide on a day-to-day basis.

“It’s likely the standards will discourage most professionals who are intending to add financial advice to their services and, to a lesser extent, advisers who currently provide limited financial services, from meeting FASEA’s standards and providing advice.”

SMSF Association CEO John Maroney says FASEA’s disregard for a legislated section of the financial advice framework would appear to contradict its goal of setting educational, training and ethical standards for all financial advisers who provide personal advice on relevant financial products to retail clients.

In its submission, the Association has proposed that a specific limited licence adviser pathway be created that provides a more appropriate framework for FASEA-related units individuals must undertake in a specialised area of limited advice.

The framework will also provide the capacity to include and recognise the different Recognition of Prior Learning (RPL) that is relevant to limited licence advisers. Currently, the standards are more likely to require a limited licence adviser to complete more courses than a full licence adviser.

The Association also intends to lodge an official application for the Specialist SMSF Adviser (SSA) accreditation to be recognised as professional designation education.

Maroney says: “If accredited by FASEA, we propose that existing advisers will be eligible for RPL where they have completed the SSA, acknowledging that it demonstrates the highest level of SMSF knowledge.”

The Association’s submission is unequivocal in its support for the “clearer standardised guidance” for RPL that FASEA’s draft legislation outlines.

“We believe that RPL credit should still be awarded for current informal learning, experience and ongoing continuing professional development, most significantly to those advisers who have 10 years’ experience in providing retail advice and have documented ongoing CPD over that period.

The submission also asks FASEA for clarity surrounding relevant degrees, specifically relating to aggregating courses over several qualifications and including superannuation, retirement and insurance as relevant degree subjects.

The Association will lodge its final two submissions regarding the Code of Ethics on Wednesday and the Examination standard before the 4 January deadline.