Continuing professional development (CPD) that is accredited or delivered by a professional association should automatically be approved by licensees under the new Financial Adviser Standards and Ethics Authority (FASEA) CPD rules, says SMSF Association CEO John Maroney.
The Association, in a submission to the FASEA, says the Authority should adopt this position on CPD to achieve “consistency, clarity and simplicity”.
Maroney says: “It’s our understanding that the current proposal is for licensees to approve 70% of a financial adviser’s CPD each year.
“From the Association’s perspective, such a proposal raises legitimate concerns about the extra compliance burden on licensees, potential conflicts of interests between licensees and CPD providers, and incentives for advisers to ‘licensee shop’ for those with a less stringent CPD policy. In addition, the ability for licensees to also be CPD providers and approve their own CPD puts the independence of the system at risk.”
He says professional associations play a key role in offering CPD via courses, training, education events and resources. They are also experienced and skilled in accrediting, designing and delivering CPD to improve industry standards.
“Having professional association’s CPD recognised as approved for FASEA CPD requirements will mean that the work being done by associations to provide accreditation for CPD material won’t have to be reworked by each individual licensee, a process that which will inevitably lead to red tape and inconsistencies.
“It also ensures that an independent body is an integral part of the CPD process, which aims to maintain advisers’ knowledge standards and provide ongoing professional development, instead of relying wholly on licensees that may not have the resources or knowledge to appropriately approve CPD for their advisers.”
Maroney says FASEA’s decision to reduce annual CPD hours from 50 to 40 has the Association’s full support. “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.
The Association’s submission also recommended that technical competence minimum CPD requirements should be on par with professionalism and ethics.
“Demonstrating technical competence is a key aspect of being a professional and given the amount of technical knowledge required in financial advice provision, the proposal is inadequate,” Maroney says.