Accounting firms must ensure their financial planner partners, referral arrangements and in-house advisers will meet the Financial Adviser Standards and Ethics Authority (FASEA) requirements, and also consider the wider impact of the incoming education framework.
At the recent Institute of Public Accountants 2018 Victoria Congress in Lorne, Victoria, Deakin University associate professor and director for financial planning Adrian Raftery said: “If you’re going to be referring your clients to a financial planner, you need to know what he or she is going to be doing for 2023.
“Talk to the financial planner you use in your business and find out what they’re doing because 75 per cent of financial planners in Australia do not have a degree in financial planning.
“Are they already qualified? If not, are they going to do further studies?
“If not, are they retiring or selling the business? Who are they selling the business to and are you comfortable with the new adviser, and could they try to take your clients because they already have an accounting arm? These are all concerns.”
Furthermore, if an adviser decides to undertake further study, that does not mean accountants will be free of any issues, Raftery said.
“Can they take on extra work?” he said.
“Because they’ve got to find an extra 10 hours a week for studying, on top of everything else.”
He also urged accountants to consider having a back-up plan for these scenarios with their adviser, as well as check the insurance policy of their accountants.
“Perhaps you need to increase your insurance [on your business to protect your client base] – maybe you need to do some studies yourself and become a financial planner,” he said.
“Or could you get some of your staff to do further study in financial planning and so you can add that arm to your business.”
Commenting on firms using offshoring for their advice operations, he said they will also need to meet the education requirements set by FASEA and have working rights.
“If they’ve got a financial planning designation already, FASEA will be assessing whether it’s appropriate and whether they’ll need to complete other sources [of education],” he said.
“But we don’t know what this will be and it may be a while yet.”
Last month, FASEA chief executive Deen Sanders said financial adviser designations and experience do not equate to qualifications under the framework the authority is establishing.
