Financial advisers can no longer rely on industry conferences to supply a large part of their continuing professional development (CPD) requirements, with new education standards removing the ability to shape the collection of CPD credits, according to I Love SMSF founder Grant Abbott.
Writing in a blog post, Abbott pointed out the new CPD guidelines, introduced by the Financial Adviser Standards and Ethics Authority (FASEA) in December 2018, removed the points-based system previously used to assess ongoing training, as well as the role of associations in setting CPD to meet membership requirements and the ability of advisers to game the system.
He said the introduction of 40 hours of CPD, spread across four defined skill areas, meant advisers had to look beyond just attending industry conferences and events to secure relevant ongoing training.
“The problem with CPD is that we have spent countless years meeting CPD point requirements from various associations to meet their membership requirements,” he said.
“For many it was a point of turning up to a conference, going in and out of sessions (ghosting sometimes) and racking those points up. For some conferences, double and triple points were awarded for each hour spent.”
The rollout of FASEA’s CPD policy replaced the points-based system with CPD hour requirements, he said, adding the ongoing training was also to be undertaken in specific categories that were not part of industry association membership requirements.
“The deal is as a financial adviser, you must look at hours when it comes to CPD and see where it fits into one of the categories above,” he said.
He pointed out that 18 hours of technical training at an industry conference would only satisfy five hours of CPD and leave an adviser with another 35 hours of required CPD in other key areas.
“If that has cost you $2000 for five hours of CPD, then that is very expensive CPD – $400 per hour. You could get a personal financial services educator to come and train you and all your staff in-house for that sort of money,” he noted.
He also warned advisers to take the CPD requirements seriously, particularly ahead of the 2019 federal election.
“Personally, I am excited for the changes as laws beat self-regulation every time … there have been too many ways to bend and shape CPD in the past – ghosting being one of them,” he said.
“We are now living in a new professional world that has real consequences and for SMSFs, with an incoming Labor government that is not predisposed to SMSFs, we have to change and change quickly.”