FASEA delivers some key concessions

19 November 2018

The Financial Adviser Standards and Ethics Authority (FASEA) has released its revised standards framework for financial advisers which include key changes aimed at meeting some of the concerns of financial advisers.

Among the changes announced by FASEA late on Friday are:

New Entrants

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FASEA will add a Post Graduate Career Changer pathway requiring an approved Graduate Diploma. New entrants will be able to seek Recognition of Prior Learning (RPL) from the education provider as per their credit and RPL guidelines.

Existing Advisers

FASEA will further define RPL for Existing Advisers and provide guidance on credits for previous course work undertaken. The Advanced Diploma of Financial Planning (ADFP) will be eligible for two course credits.

Further guidance will  be given on course work undertaken to attain an industry designation (for example the FPA’s 5 unit Certified Financial Planner designation after 2007 or the AFA’s Fellow Chartered Financial Planner designation after 2014)  and the approval process so that holders of these can be eligible for two course credits.

The Related Degree definition has been revised and advisers will be able to undertake an AQF8 Graduate Diploma once approved by FASEA.

Advisers will be able to seek RPL for the Corporations Act and Behavioural Finance Client and Consumer Behaviour bridging courses. There will be no RPL available for the newly created Code of Ethics bridging course.  FASEA will also revise the Corporations Act unit to include other legal obligations such as Anti-Money Laundering, Privacy Act 1988 and Tax Practitioners Board requirements.


FASEA has merged the curriculum for the Financial Adviser Examination into three modules and will focus on applied knowledge acquired in actual financial advice scenarios, testing the following competency areas:

  • Corporations Act (emphasis on Chapter 7 – Financial services and markets)
  • Financial Advice Construction – suitability of advice aligned to different consumer groups, incorporating consumer behaviour and decision making
  • Applied ethical and professional reasoning and communication – incorporating FASEA Code of Ethics and Code Monitoring Bodies


The duration of the exam has been set at 3.5 hours including reading time. The exam will consist of multiple choice and written response questions and will be open book for statutory materials. FASEA will publish a curriculum framework, recommended reading lists and a practice exam.



FASEA has reduced the number of CPD hours advisers are required to complete from 50 to 40 hours each CPD year (including a maximum 4 hours of professional reading), of which 70 per cent will need to be approved by the licensee.   FASEA has defined minimum hours for CPD categories as follows:  Technical – 5 hours, Client Care and Practice – 5 hours, Regulatory Compliance and Consumer Protection – 5 hours, Professionalism and Ethics – 9 hours, with the balance up to 40 hours consisting of qualifying CPD.

Transition arrangements for 2019 will be on a pro-rata basis for licensees whose CPD year is not a calendar year.


Code of Ethics

FASEA Code of Ethics addresses the values of Trust, Competence, Honesty, Fairness and Diligence. The 12 standards have been revised to provide greater clarity of what is always expected of an adviser to act , in all cases, in a manner that is demonstrably consistent with the law.

Case studies have also been included in the Code of Ethics explanatory statement to provide additional guidance for key stakeholders.


Foreign Qualifications

FASEA will now recognise advisers who have had their assessments already assessed by Department of Education and Training (DET) approved bodies such as CAANZ and CPA.  FASEA will undertake assessment for a fee of foreign qualifications to determine the relevant pathway to meet FASEA’s education standard as part of FASEA’s degree assessment service.

A precedent database of approved foreign qualifications will be displayed and updated on FASEA’s website.


Provisional Relevant Provider Expression

While most submissions received supported the expression “Provisional Financial Adviser”, FASEA has added an alternative expression “Provisional Financial Planner” to be used interchangeably with “Provisional Financial Adviser”.



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Now we are getting to the pointy end of the lobbying cycle, it is interesting that many Federal MPs are saying privately that they have no idea what FASEA actually is, or what it's requirements are. But all of a sudden they are taking an active interest. Talk about "Yes Minister".

Also, it pretty rough on any new entrants on who to become to be a financial planner:- still no degree in Western Australia despite Curtin Uni saying four months ago they planned to start one in 2019. Still no info. And there’s very little online access to undergraduate courses. It’s gonna be crazy in WA in 2024 if things aren’t clarified very soon. This has been the most pathetic handling of an issue within Govt that I can think of, in decades.

Agree Steve, many non metropolitan advisers in NSW and VIC are in the same boat. I work for a major rural University and they have decided there is not enough demand to expand their Commerce Degree. Unfortunately, we cannot all send our kids off to Sydney University, pay for their accommodation, buy them a car, pay for their food to study Financial Planning. Some of us have to send kids to the closest possible Uni and so that they can board at home. So inevitably this will cause a gap in areas outside the cities.

Take a closer look Mike, there are some bombshells in there. Here is one example....
The Code of Conduct requires fees to be 'fair and reasonable and represent value for money for the client'. This is very easy to say and it seems reasonable on the surface. But in practice, this will be a nightmare. What sort of documentation and analysis will be required to meet that test? Do I have to compare my fees to market rates? Must I show there are tangible cost savings or tax reductions for the client which outweigh the fees? What about likely, but uncertain benefits, such as future returns? Where do we stand on intangible benefits such as peace of mind or protection against mistakes which could otherwise be made without advice? What about those with higher balances, who receive a greater benefit, can that be factored in? What about irregular services, such as ad hoc assistance and/or advice during redundancy, marriage breakdown, major asset purchase, transition into retirement, Centrelink, insurance claims etc. which are normally covered as part of a package, when required, via ongoing service fees? Must all fees be linked to hours worked in a specified period? This is a minefield. What one person thinks is good value, may seem like a rip off to another. Look at Rio Tinto's share price right now. The market value is $79.31. But I have one research house saying fair value is $52 and another $85.63. These are major research houses with access to all the same publicly available information and they have dramatically different views. So how the hell can I predict what an auditor from a code monitoring body will percieve as good value when it comes to the fees I charge for my service? No other profession is required to adhere to such an absurd value for money test. This wasn't in the draft, so FASEA have denied us the opportunity to provide feedback. What a complete debacle.
This is what Kenneth Hayne said on the matter in the interim report 'The uncertainty of the content of what is promised is not an issue to be solved by regulation. It is, and must be, a matter for client and adviser to decide what if any services will be provided after the provision of initial advice. It is, and must be, a matter for client and adviser to decide how those services are defined' page 132

Sounds like a business opportunity in setting up a financial advisor comparison site.

That us the absolute limit of your intellect isn’t it.

Maybe you could do a " Christopher Zinn " and set up a whole new adviser comparison and rating site using 1000's of adviser's data provided to him by Rainmaker without any authorisation by the advisers.
The advisers would then have to Opt Out of the new site, just like the Adviser Ratings debacle who automatically included all the adviser details received on their site, again without authorisation from the advisers.
Did Christopher Zinn pay for the information provided?
Did Rainmaker receive any payment for the information provided?
These comparison sites are simply devised for one reason only and that is for the people behind them to make money.
The perception pushed is that they help the consumer make informed decisions and are promoted almost as if they are a social service, but they are nothing more than a business generating income from either advertising or on-selling of data.

Having read some of the comments, the universities should take this opportunity to offer more online and blended programs.

I still think it would make far more sense to have an exam first to determine what "holes" exist in advisers understanding and only have to complete subjects in deficient areas. I have no problems in improving my understanding, but fail to see why I need to waste time and resources on something I already understand. So I will be giving every subject a "0" in feedback if it does not teach me something new and important.

Who will be assessing RPL, and how will it be assessed? I know of situations where the difficulty of assessing the RPL wasted more time and money than just repeating the course. This will be the next bottleneck in the process that will stop things.

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