FASEA demands no blurring of adviser status

24 July 2018

The Financial Adviser Standards and Ethics Authority (FASEA) has made clear that planners completing their professional year will not be able to call themselves or be referred to as either planners or advisers.

At the same time as outlining its proposals for the Professional Year, FASEA made clear that the so-called Provisional Financial Advisers cannot be referred to in terms which will blur their status as someone undertaking training.

It said the Provisional Relevant Provider Term represented an essential component of the standards framework to ensure it was clear to consumers when they are receiving advice from a Provisional Relevant Provider, rather than a Relevant Provider.

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“FASEA has been requested to specify a word or expression to refer to a Provisional Relevant Provider and is proposing the term ‘Provisional Financial Adviser’ be used to ensure it is obvious that the individual is undertaking the work and training requirements,” FASEA said.

“Provisional Relevant Providers must be referred to by this term and no other similar term, including Relevant Provider, Financial Adviser or Financial Planner. Other terms that were considered by the Standards Authority include ‘Candidate Adviser’, ‘Trainee Adviser’ and ‘Supervised Adviser’.”

The authority announced on Monday that it was proposing that the professional year would encompass practical learning of four core technical competencies that provisional relevant providers have learned during their degree studies – technical competence, client care and practice, regulatory compliance and consumer protection, professionalism and ethics.

It said a quarterly approach to the supervised practical learning was being proposed.

FASEA said new advisers would undertake the PY requirements in their first continuous 12 months of full-time employment and it was proposed they would be known as Provisional Financial Advisers during that time.

It said that where an adviser took a career break for periods of less than two years, they would be able to return without additional requirements over and above professional and education standards for existing advisers.

However, for periods of two years it said they would need to undertake appropriate continuing professional development to ensure they were equipped with the latest regulatory and licensee requirements.

The guidance also proposes that a supervisor within each advice business will be appointed to take responsibility for the Provisional Relevant Provider’s work and training, ensure evidence is collected in a logbook and attest to the completion of their PY requirements.

The Provisional Relevant Provider’s licensee will also be responsible for providing the appropriate resources to ensure their training standard has been met.

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The term "Financial Advisor" is in itself designed to blur the publics understanding of the role.
Whenever or wherever a person receives a wage or commission from an employer or organisation whose products they benefit from selling, then quite clearly they are compromised and should no longer be able to call themselves an advisor. They should be required to call themselves a broker or sales person as is the case in the mortgage and insurance sectors. Only when they are truly independent and there is no conflict of interest should they be able to call themselves an advisor.

Bill, you may find yourself charging pure fee for service before long, home loan commissions are going the way of the dodo didn't you know?

More FASEA hypocrisy - experience is so important that newly graduated "trainees", without any experience, must not call themselves Advisers, nor can those undertaking their Professional Year, with less than a years experience, call themselves anything but a Provisional Advisers. At the same time FASEA will not recognise the years of experience of existing advisers in any meaningful way. The double standards are indicative of the shallow thinking that is going on.

That is because there is simply an agenda being driven here and that is to purge the financial services space of as many older, experienced advisers as they possibly can and effectively attempt to start again with a fresh slate.
It is blatant and obvious that some factions within Govt and ASIC detest the thought of where the financial services profession has originated from and it is still in a transition phase which it is rapidly progressing.
However, the lack of consideration provided to older advisers who have had long and successful careers in the provision of service and advice to their clients over many years is being ignored as the people in control of the cleansing process have been given instruction to get rid of the "dead wood" and to re-create now...no waiting...no consideration, fairness or empathy.
This is not to say that everyone providing advice must be highly proficient, knowledgeable and compliant, however, the loss of experience will be immense.


** Interesting quirk/conflicting information** The recent FASEA release does not mention anything about a note made in the "Explanatory Memorandum" associated with the Corporations Amendment (Professional Standards of Financial Advisers) Act 2017 which states:

2.28 There are two options for persons completing their professional year. First, they may undertake work and training for the purposes of the
professional year when they do not hold any authorisation to provide advice. For example, the person may perform appropriate paraplanning or
research work as determined by the body. Second, if the person undertaking their professional year has obtained a degree or higher qualification and passed the exam, they may be authorised as a provisional relevant provider.

Does this mean a Professional Year can be completed concurrent with, or prior to, Degree and Exam requirements?

I would think if this was about helping consumers easily understand, then the term would be trainee adviser, as it is simple and easy to understand. I think a lot of people would say " please explain" to provisional financial adviser.

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