The shift to the new continuing professional development (CPD) model overseen by the Financial Adviser Standards and Ethics Authority (FASEA) has been described as “good, bad and ugly” by one SMSF expert, who claims the model is an improvement but one that is rigidly enforced.
I Love SMSF chief executive Grant Abbott said the upside of the shift to the FASEA CPD model was the financial services industry had independent legal standards that had to be adhered to by all advisers and their licensees. Abbott also pointed out CPD was no longer tied to accreditation from associations, opening the field for other providers.
“The FASEA standards are a generational shift where advisers themselves and also licensees take control of their CPD,” he said in a blog post on his company’s website.
“It means in the specialist SMSF advising space that I Love SMSF can provide FASEA CPD with or without association accreditation, which results in a significant saving as FASEA does not charge fees for CPD.”
However, he said the bad part of the transition to the new CPD model was that some advisers could not find enough hours of FASEA-compliant CPD to meet their obligations for the last financial year.
“At 30 June 2019 there was a mad scramble as advisers hunted, pleaded and literally begged for FASEA CPD hours to meet their first transitional year from voluntary association CPD to legally required FASEA CPD,” he said.
“Now we are into a full year and 40 hours must be completed across categories ranging from technical, professionalism and ethics, client care and practice, consumer laws and the Corporations Act plus specialist content … for the remainder.
“I am sure there will be a scramble in June 2020, but the smart advisers have their CPD year planned already.” Earlier this year, Macquarie Bank Technical Advice Services stated advisers were also able to spread CPD requirements over 18 months from the start of 2019 to mid-2020.
He also highlighted as ugly FASEA’s policy of considering advisers who do not have sufficient CPD within the correct time frame as in breach of the law.
“If you don’t make the FASEA CPD grade, then your licensee must notify ASIC and you will be named and shamed on their website plus of course continuous infractions will lead to the end of an adviser’s career and business,” he said.
“FASEA is literally a law unto themselves. Its standard of 40 hours of CPD per year is the law thanks to the Corporations Act 2001, which provides FASEA with legal powers. So for advisers – abide by it or get out of the industry.”