Government proposal to simplify the regulatory framework applying to financial advisers

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The government announced on Wednesday its intention to expand the operation of the Financial Services and Credit Panel (FSCP) within the Australian Securities and Investments Commission to encompass the functions of a single, central disciplinary body for financial advisers.

The government further proposed that the standard-making functions of FASEA would move to Treasury. The remaining elements of FASEA’s legislative functions, including administering the adviser examination, are proposed to be incorporated into the FSCP’s expanded mandate.

Legislation implementing these reforms is intended to be introduced into Parliament in the first half of next year.

FASEA will work closely with Treasury and ASIC to ensure an orderly transition to the new regulatory framework.

In the interim FASEA continues to administer its functions under the Corporations Act including administering the adviser exam and approving bachelor or higher degrees and equivalent qualifications. FASEA notes that the legislated timeframe for existing advisers to pass the FASEA exam by the end of 2021 has not changed and encourages advisers who have yet to pass the exam to continue their studies and sit the exam

FASEA has worked diligently to carry out its functions under the Corporations Act to provide a framework for lifting the ethical, education and training standards of advisers.

Key outcomes of this work to date have included:

  1. Developed and implemented seven standards to meet the statutory requirements of the Corporations Act covering:Education Pathways
    – Work & Training (Professional Year)
    – Continuing Professional Development (CPD)
    – Provisional relevant provider term
    – Foreign Qualifications
    – Code of Ethics
    – Examination
  2. FASEA, with the support of the Exam administrator (ACER), has successfully offered 9 exam sittings to date on more than 45 exam days and 600 exam sessions. Since June 2019, exams have been offered in capital cities and in 22 regional locations across Australia (with the April and June 2020 exams being remote only exams due to COVID-19 restrictions).
  3. Over 10,460 advisers have passed the adviser exams held to date.
  4. Overall, 89.5% of advisers who have sat the exam (irrespective of how often it was sat) have passed, representing 49% of advisers on ASIC’s Financial Adviser Register (FAR).
  5. FASEA has accredited a wide range of Higher Education Provider (HEP) degrees and courses that meet the FASEA curriculum standard including more than 70 historical courses, close to 100 Bachelor or higher degrees and over 35 bridging courses with the recognition dating back to 1982 (well beyond that which universities would generally recognise).
  6. FASEA has recognised prior learning (RPL) for existing advisers by approving education undertaken to attain a professional designation for 6 professional associations.
  7. Universities and higher education providers report strong enrollment of existing advisers and potential new entrants in FASEA approved courses. Based on annual returns completed by HEP, as at the end of 2019 nearly 3000 existing advisers are enrolled in bridging courses, existing advisers are enrolled in a further 6,500 graduate diploma subjects and 900 potential new entrants to financial advice are enrolled in bachelor or higher degrees.
  8. Approximately 250 new entrants have commenced their Professional Year with over 80 already passing the exam.
  9. FASEA’s automated Education Pathways tool has assisted a significant number of advisers to understand their education requirements with over 10,000 uses of the tool.
  10. FASEA has assessed over 500 foreign qualifications for equivalence with a FASEA approved degree.

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