News

FASEA

Common theme to FASEA feedback

FASEA requirements

The educational requirements under the FASEA framework have been labelled impractical for members of the Stockbrokers and Financial Advisers Association.

The Stockbrokers and Financial Advisers Association (SFAA) has added its voice to the common assessment that the Financial Adviser Standards and Ethics Authority (FASEA) professional and educational requirements are too rigid and impractical.

During a House of Representatives Standing Committee on Economics hearing to scrutinise the financial advice sector, SFAA chief executive Judith Fox said: “FASEA’s exam and education requirements were introduced to improve the quality of retail advice being offered. However, while this requirement applies to all retail advisers, they are geared solely to the financial planning industry. The board of FASEA is comprised of financial planners, financial planning academics and consumer representatives unfamiliar with the investment industry.

“The unintended result is that stockbrokers, many of whom have spent decades successfully helping mum and dad investors, are now required to complete a university qualification in financial planning, which is totally irrelevant to their profession, and sit an exam with a financial planning focus or quit the industry.”

Fox noted it was not practical for stockbrokers to be subject to the FASEA requirements in their current form as they often only work hand-in-hand with financial planners, in the main providing advice in execution and management in relation to the investment component, often regarding direct equities, of an overall plan developed by a planner.

Further, she drew the committee’s attention to some of the longer-term effects the new educational requirements will likely have on the stockbroking sector.

“In order to remain in or enter the industry any graduate with a finance, economics or law degree from a top globally ranked university is considered less qualified to be an investment adviser than a graduate in financial planning. And the graduate from the top globally ranked university will have to complete an unrelated degree in financial planning before they can remain in or enter the investment industry,” she noted.

“There are serious consequences to this. The most serious of which is that top graduate talent will be deterred from entering our profession and this will occur at the same time as a significant cohort of experienced stockbrokers is exiting the industry.”

The Financial Planning Association and Association of Financial Advisers also expressed concerns to the committee about diminishing practitioner numbers due to the recent pace of reform and regulatory change, including the introduction of the FASEA framework.

During the hearing, committee chair Tim Wilson called for FASEA to be more accountable than it presently is.

Copyright © SMS Magazine 2024

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital