Financial Planning legislation changes – what does it mean for you?
New legislation set out by the Financial Adviser Standards and Ethics Authority (FASEA) requires new financial advisers to hold a relevant university degree by 2019, and existing advisers to achieve this by 2024. It is set to raise the professional, ethical and education standards of the financial planning industry.
Basically, this has kicked off a series of new benchmarks that will eventually see all financial planners holding degree-level education, sitting an exam, undertaking continuing professional development and subscribing to a code of ethics.
So what’s some key initiatives of the new changes? New and existing advisers giving financial advice on Tier 1 financial products (excluding general insurance and deposit products) to retail clients will need to meet new requirements, including:
- Compulsory education requirements for both new and existing advisers;
- Supervision requirements for new advisers;
- A code of ethics for the industry;
- An exam that will represent a common benchmark across the industry; and
- An ongoing professional development component.
Importantly, the standards relate to Tier 1 financial product personal advice. Tier 2 financial products and those giving general advice only on Tier 1 products are not covered by the new standards.
Um, who’s FASEA?
FASEA govern the conduct of professionals in the financial advice sector by establishing educational and training requirements, developing and setting an industry exam, as well as the formation of a code of ethics that all advisers will be required to adhere to.
And what do I have to do?
If you’re an existing advisor, the transition arrangements have been proposed by FASEA but are yet to be confirmed. The proposed requirement for existing advisers depends on the individual’s existing qualifications.
If you’re new to the financial industry you’ll require an Australian Qualifications Framework (AQF) Level 7 (or higher), FASEA-approved qualification, equivalent to a bachelor degree.
What else is new?
Monarch Institute have just partnered with the University of New England (UNE) to create an opportunity for Monarch Institute graduates. While the FASEA standards on education are still to be finalised, the initial guidance provided by FASEA indicates there are two ways to get a relevant degree for FASEA compliance purposes. The undergraduate pathway is the UNE Bachelor of Commerce (Financial Planning)*. The post-graduate pathway is UNE’s Graduate Diploma in Financial Planning*. Please note, under both these options, FASEA have not accredited either, and FASEA have not yet released the final position on education standards. This means the UNE courses are subject to change, and will need to be accredited by FASEA regardless.
*IMPORTANT: FASEA standards are not yet finalised. Consequently, these courses are not FASEA accredited.
UNE has been delivering online, flexible education longer than any other Australian university. They’re ranked number one in the national list of Australia’s best online universities by Online Study Australia.