An extension to the deadline for advisers to comply with new education requirements have moved a step closer after the federal opposition supported the move in parliament while also slamming the handling of the changes by the Financial Adviser Standards and Ethics Authority (FASEA).
Labor supported the passing of the Treasury Laws Amendment (2019 Measures No 3) Bill 2019 through the House of Representatives on 11 February and its progress into the Senate the next day.
The bill amends the Corporations Act and defers the transitional time frames for advisers to meet the FASEA exam and tertiary education requirements.
The new proposed final date for an adviser to hold an approved degree or equivalent qualification will be 1 January 2026 (deferred by two years) and for the exam to be completed by 1 January 2022 (deferred by one year).
The new dates were first announced by Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume on 30 August 2019 and the bill introduced into parliament on 5 December.
In passing the bill through the lower house, Labor was critical of the handling of the changes to education and professional standards by the government and FASEA.
Opposition financial services spokesman Stephen Jones said the changes were first announced by the government in 2015 and it was still unable to get the time frames right.
“The horror show has unfolded since then under the leadership revolving door and the cavalcade of Liberal ministers, treasurers and assistant treasurers,” Jones said.
“It gets worse: the independent body [FASEA], established by the former minister for financial services, has been through three different CEOs in its first 18 months.
“The consultation with the industry itself has been almost entirely absent for those 18 months. Standards were issued mere days before they were due to come into effect, and the FASEA exam, as the minister pointed out in his second reading speech, wasn’t in a location which was going to make it even possible for a large swathe of financial advisers to be able to attend and sit that exam, let alone pass it.”
Liberal MP Andrew Laming was also critical of the exam process, adding this was a reason to allow for an extension.
“They [advisers] recognise the need for these changes to be made. They’ve asked for more time – for very good reason. In many cases, these FASEA exams weren’t even ready in time. They weren’t available to regional areas. So it’s important that that is provided and there’s adequate time,” Laming said.
“The FASEA exam having the additional year – to 1 January 2022 – is reasonable and I think the overall requirements for the other specific, specialist areas through to 2026 is a significant period of time now for the profession to adapt and join.
“The profession has been let down by not always complete and adequate representation by their bodies. They haven’t worked together to make sure that the views of the sector were put forward early, so now we’re mounting a rearguard move to give the financial planning sector a chance to express their say. These extra two years absolutely do that.”
At the close of parliamentary business on 12 February, the bill had passed through the House of Representatives after a detailed debate and had entered the Senate, where it awaits a second reading. Once that has taken place, and if no amendments are made, the bill will become law after receiving royal assent.