Maybe CPA, IPA and ICAANZ should act together for a positive change for their memberships. What do others think?
Fewer accountants will become financial advisers, compliance requirements and costs increased, and finally a need for a financial planning degree going forward.
New standards for financial planners cannot be met before the January 1 deadline
AFR 4 October 2018
https://www.afr.com/news/policy/educati ... 921-h15pmr
by Robert Bolton
The new Financial Adviser Standards and Ethics Authority looks likely to miss deadlines for approving standards for financial advisers despite the Hayne royal commission reserving some of its worst criticism for the industry's practice of providing fees for no service, inappropriate advice and improper advice by advisers.
The Financial Planning Association (FPA) said it is "frustrated and in a cloud of uncertainty" and predicts there are unlikely to be any new financial planners entering the industry for at least 18 months.
CPA Australia, representing accountants, predicted an exodus of advisers who will decide not to retrain from January 2024, which is the deadline for them to get new qualifications.
FASEA was established in January 2017 although its new chief executive, Stephen Glenfield, was not appointed until a month ago.
The authority has set a deadline of January 1, 2019 for new financial advisers to get higher-education qualifications before they can be licensed.
Requirements include 24 bachelor-degree subjects that have been approved by FASEA. But as recently as August 23 the then-acting managing director, Dr Mark Brimble, said in written correspondence that FASEA's standards were yet to be finalised and the organisation had "not yet started accrediting programs and courses".
A full-time student would need 36 months to complete 24 units at bachelor level, meaning it would be three years before any would-be financial adviser could start work. This assumes a higher education provider had submitted a course for FASEA approval before the end of this year.
Chief executive at FPA Dante De Gori said "what the royal commission means is it's more important than ever for these standards to be implemented as soon as possible. These are needed now more than ever."
He said as far as new entrants were concerned "you not only have to have an approved degree but you also need to do a minimum 12 months' traineeship and pass an entrance exam and sign up to a new code of ethics".
On September 21, in response to a written question from The Australian Financial Review, FASEA said the code of ethics was still in draft form and it was considering industry and consumer feedback "prior to finalising the code in coming months".
The code of ethics looks likely to be a major stumbling block for existing entrants. Studying an approved course on the code is mandatory for all existing advisers, including advisers who already have a higher education qualification in a related course.
But higher education providers are notoriously slow in approving new courses, which have to be submitted to academic councils and, as FASEA admitted, the code itself is not finalised.
Advisers with no formal qualifications will have to do eight approved subjects by 2024.
And advisers who have qualifications related to the industry will have to do a minimum of three courses at bachelor-honours level before 2024.
"The timelines are set in legislation and they are tight and getting tighter the longer it goes without being finalised," said Mr De Gori.
"We want FASEA to come out sooner rather than later for our members and for the education sector so would-be advisers can enrol."
CPA Australia said research has revealed more than 50 per cent of 25,000 existing financial advisers may exit the sector over the next five years, in part owing to the FASEA requirements.
The head of external affairs at CPA, Paul Drum, said the consequences would be far reaching, from affecting accessibility of advice for the broader community to a loss of mentors for younger advisers
"With less than three months to go, limited consultations and with no published education standards or a finalised Code of Ethics we are now deeply concerned how education providers, licensees and professional associations can be ready to appropriately support a successful transition to the new framework," Mr Drum said.
A spokesperson for FASEA told the Financial Review they do "not anticipate a drastic change in the level of new entrants" despite the deadline of January 1, 2019.
|Merry Christmas to Peter Wilson. When it was suggested that Peter Wilson should be independent of the old board so that we can have a fresh start Peter responded with "That's your issue". Summary of the meeting here: viewtopic.php?f=23&t=594|
A good summary of where we are up to by Joe Aston of the AFR, linked to from here: viewtopic.php?f=5&p=4137#p4137
If you are new to this website read the story so far: viewtopic.php?t=321#p1793
Check out some of the AFR articles, too many to list and check out some of the ABC reports: http://www.afr.com/business/accounting/ ... 215-h055ej http://www.afr.com/business/accounting/ ... 211-h02x1d http://www.abc.net.au/news/programs/the ... s,/8626662
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