Education, Financial Planning, Regulation

Enforce bridging course if advisers fail exam

Advisers should only have to do bridging courses if they fail exam.

Financial advisers and accountants should only be compelled to do bridging courses under the new education reforms if they fail the national financial adviser examination proposed by the standards board, according to an academic.

Deakin University associate professor and certified financial planner Adrian Raftery said while existing advisers have to complete bridging courses for financial services regulation and the Financial Adviser Standards and Ethics Authority’s (FASEA) code of ethics, his university suggested in a submission to FASEA last month advisers should only complete bridging courses in the event they fail the exam.

“They shouldn’t have to do those courses and incur extra time and extra financial cost they don’t have. Let them do the exam. If they get through fantastic and that is what we want to see,” Raftery told selfmanagedsuper.

“But if they don’t get through, they should realise themselves maybe they should have studied a bit harder or maybe they don’t know all their stuff that they thought they did.”

His comments come after FASEA released a consultation paper yesterday with proposals and more details in relation to the national financial adviser examination.  The exam will test advisers on the Corporations Act, with emphasis on financial services and markets, the FASEA code of ethics, behavioural finance, financial advice construction, and applied ethical and professional reasoning and communication.

Raftery, who also holds the chartered accountant and certified public accountant qualifications, said the same rules would apply to accountants advising on SMSFs, who will also have to pass the national exam if they wish be a financial adviser.

“It’s a matter of are they authorised to provide financial advice because there’s no longer that exemption to advise on SMSFs since 2016. Forget the fact they’re an accountant or not. Are they a financial adviser or not in terms of the legislation?” he said.

“They need to comply in exactly the same way as any other adviser and they need to be aware of the financial services regulation.”

On FASEA’s proposal that advisers be allowed to resit the exam twice before being prohibited to be an adviser, he suggested instead of completely excluding advisers after three strikes, they should be made to study a degree of 24 units instead of a diploma of eight units before being allowed to resit the exam.

“It’s great to keep the door ajar if they were willing to do significant remedial work and that will be a full degree because at the moment they only have to do the proposed eight units under a graduate diploma,” he said.

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