FPA, AFA propose more adviser education changes

The latest submissions come after the government announced in April that it had revised the draft legislation with changes to the degree requirement as well as the timeframe advisers will have to meet the proposed standards.

In a submission made this month, the FPA requested that a section of the draft be amended so that the standards-setting body is allowed to approve other assessments in place of the exam.

“This will allow more flexibility for both existing relevant providers and individuals looking to become relevant providers going forward, and has the benefit of the standards-setting body outsourcing the production and administration of the exam as a cost saving measure,” the FPA said.

“Some existing relevant providers may have recently passed exams which could be deemed to meet the criteria set by the standards body.”

The FPA also called on the government to disclose how it reached the projected cost to the industry of the new standards, saying this will have a “significant impact” on the price of advice for consumers.

“An FPA professional partner has indicated that just to meet the requirements under Section 1546B(1) will cost between $11,500 and $21,500 per planner depending on their current level of qualifications and up to 700 of their planners may need to do some level of further study,” the submission states.

Further, the FPA questioned the section which states that a “highly qualified expert in their field” may be exempt from taking the exam.

“We would question how this will be defined, and whether this will ensure the integrity of the overall framework… We would also note that most financial planners would consider themselves an expert in their field and are in many cases highly qualified which could lead to the body being inundated with exemption applications,” the FPA said.

Meanwhile, the AFA has said it recommended the government include flexibility regarding the skill sets and experience of advisers as well as making it mandatory to be a member of a professional association.

The association also suggested there be fair board-level representation, a “common sense” approach to the supervision of new advisers and an urgency to establish the standards-setting body.

“It is imperative the standards body be established promptly to allow the new professional standards to be developed and communicated,” said AFA chief executive, Brad Fox.

“We want to give this significant development in professional standards in the Australian advice industry every reason for success, and we believe urgency as well as a common sense approach to establishing the framework of the standards board is paramount.”