The federal government has extended the time available for financial advisers to complete the mandatory adviser exam by a year and has also granted a two year extension to meet Financial Adviser Standards and Ethics Authority (FASEA) education requirements.
The extensions will, however, only apply to those considered as existing advisers at the end of 2018 and who were registered with ASIC by the 1 January, 2019.
The new timetable was announced, via media release, by the Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume who said the government would legislate to provide additional time for existing advisers to meet new qualification and examination requirements set by FASEA.
Under the new requirements, advisers who were registered on the ASIC Financial Adviser Register on 1 January 2019 must complete the FASEA-approved exam by the new date of 1 January 2022, instead of 1 January 2021, and meet FASEA’s qualification requirements by 1 January 2026, instead of 1 January 2024.
Hume noted the exam was only available in capital cities at present and would not be available in regional areas until September 2019 and the extension meant all advisers will have at least two years to sit the exam.
“The Morrison Government is committed to restoring trust and confidence in Australia’s financial system, as part of its plan for a stronger economy. A key part of this is ensuring we continue to build trust in financial advice as a true profession,” Hume said.
“While making these changes to raise education standards in the industry, we also need to balance the impact of these reforms against maintaining the ongoing availability, quality and affordability of advice.”
“The extension of the qualification requirements will assist working parents, including those taking parental leave during the transition period, to have sufficient time to meet the requirements, maintaining a diverse adviser industry.”
Hume had flagged a change to the timetable was pending at a recent speech to the Financial Services Council 2019 Summit when she said the government was listening to the concerns of advisers regarding the timetable and was ‘carefully considering how to proceed’.
The move has been welcomed by CPA Australia, the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA).
CPA Australia Public Practice Manager Keddie Waller said it was important to balance the impact of the reforms against maintaining the ongoing availability, quality and affordability of advice.
“We note, however, that there are elements, such as recognition of prior learning, that are still being finalised by FASEA,” Waller said,
AFA chief executive Phil Kewin said, “This an important development that reflects the Government’s recognition of the challenges in the FASEA process.”
“We have worked closely with the FPA on this and we are pleased that this work and the engagement we have had with the Government, along with the work our members have done visiting their local MPs, has been worthwhile. It is clear the Government has listened.”
Kewin said the extension for meeting the education requirements was important for advisers who are required to complete a full Graduate Diploma and the AFA would seek flexibility in the study requirements for financial advice specialists.
FPA chief executive Dante De Gori said the extension meant existing advisers were not being unfairly disadvantaged by delays from FASEA in rolling-out its exam and its new Code of Ethics.
“The Government has done the right thing by proposing to extend the deadlines for all existing financial planners to sit and pass the FASEA exam and meet the education standard.”