The SMSF Association has called on the Financial Adviser Standards and Ethics Authority (FASEA) to revise its policy regarding the approval of continuing professional development (CPD) requirements in order to improve the integrity of the process.
Specifically, the SMSF Association, in its latest submission to the government body, proposed that any CPD points or hours accredited or delivered by a professional body, like itself, be automatically approved by financial planning dealer groups.
Currently under FASEA’s proposals licensees have to approve 70 per cent of an adviser’s CPD activity every year.
SMSF Association chief executive John Maroney said he believes the suggested change to the process will add consistency, clarity and simplicity to the CPD requirements.
Further, Maroney highlighted some worrying issues for the advisory community that may arise under the current proposal.
“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,” he said.
“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 argued professional bodies such as the SMSF Association already play a key role in offering CPD training to improve industry standards and so have the experience to play a more significant role regarding the FASEA requirements.
“Having professional associations’ 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 will inevitably lead to red tape and inconsistencies,” he said.
“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.”
The SMSF Association submission also recommended technical competence minimum CPD requirements be brought in line with those governing ethics and professionalism.
“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 said.
On a positive note, the association said it supported the move reducing the number of CPD hours needed to be completed on an annual basis from 50 to 40 hours.