The Association of Financial Advisers (AFA) has called on the federal opposition to help pass a bill that will provide a one-year extension to the time frame for financial advisers to complete the FASEA exam.
The Treasury Laws Amendment (2019 Measures No 3) Bill will add a further year onto the time frame, which is set to conclude at the end of this year, and was slated to enter the Senate this week.
The AFA’s call comes after the ALP decided to reattach an amendment to the bill that would ban conflicted remuneration linked to the sale of shares in listed investment companies/listed investment trusts.
The amendment was previously attached to the FASEA extension bill but had been removed prior to it proceeding through the House of Representatives in February. The addition of the amendment will prevent the bill entering the Senate as it needs to be approved by the lower house first, which appears unlikely to occur in the three sitting days remaining until August.
AFA chief executive Philip Kewin said the financial advice community had been preparing for the extension, as the policy had been announced in August 2019, and was facing considerable pressures as a result of the COVID-19 economic downturn and lack of parliamentary action.
“With the commencement of the coronavirus crisis, financial advisers seeking certainty on this extension have been impacted by the closure of parliament, delaying the necessary debate in the Senate and also the cancellation of face-to-face exams,” Kewin said.
“The AFA reminds the Senate that at this stage fewer than 30 per cent of current advisers have passed the exam, leaving 70 per cent who would be forced to cease providing financial advice if they cannot pass the exam by the end of this year. This leaves the hundreds of thousands of clients of these financial advisers exposed, the same clients who are now increasingly reliant upon their adviser for support and guidance.”
He added many advisers had used the extension to focus on their clients during the lockdown, but were concerned about their own futures without an extension to the time frame.
“We want our members to be focused on their clients, not only at this critical time, but all the time. The delay in passing this legislation is, however, causing anxiety and having an increasing impact on the mental health of financial advisers,” he said.
He also noted the addition of the ALP amendment was a backflip on its previously stated bipartisan support for the exam extension legislation, which had been based on delays in producing the exam and the cancellation of face-to-face exams due to the lockdown.
“We have now been advised that this bipartisan support has been withdrawn and the ALP wants to include an unrelated amendment that will most likely prevent it being addressed in the Senate this week,” he noted.
“We request that the Senate take action to pass this bill this week and avoid jeopardising the future and well-being of the financial advice profession and their clients.”
