John Maroney

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.

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John Maroney

A Royal Commission into banking and financial services will provide an opportunity to increase transparency and improve ethics and professionalism across the financial services sector, says SMSF Association CEO John Maroney.

Addressing the Government’s announcement today of a wide-ranging inquiry into banking and financial services, Maroney says it will prompt a thorough review to ensure any poor or unethical practices harming consumers are stamped out.

“Ensuring that consumers always receive high-quality advice and services in an ethical and efficient manner from these sectors is essential to Australia’s national prosperity, as well as the retirement savings of all Australians.”

Maroney says that the Association is pleased that SMSFs are excluded from the terms of reference for the Royal Commission.

“While the SMSF sector has been excluded from Royal Commission’s inquiry, the sector has had significant scrutiny from the Cooper Review in 2010 and the Murray Inquiry in 2014 and emerged from both reviews with a high level of support and confidence in the sector.”

He adds that the Royal Commission hopefully will not have any impact on necessary reforms in the financial advice sector that are underway to improve the educational and ethical standards for advisors.

“These reforms, which are strongly supported by the Association, take effect from 1 January 2019 and will bring greater professionalism to the advice industry.”

Maroney says the integrity of the superannuation system and professionalism of those advising consumers are core beliefs of the Association, and as such it welcomes any opportunity to participate in a Royal Commission that will enhance the system’s ability to meet these worthy goals.

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