The exam will continue and financial advisers will still be required to obtain a bachelor degree but the delivery mechanism has changed. The Financial Adviser Standards and Ethics Authority (FASEA) will cease to exist.
In one fell swoop the Government has rid itself of FASEA while putting in place the structure of the single disciplinary body recommended by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The single disciplinary body will be achieved by expanding the operation of the Financial Services and Credit Panel (FSCP) within the Australian Securities and Investment Commission (ASIC) which currently supports the regulator in the exercise of its regulatory functions with respect to the making of banning orders against individuals for misconduct.
According to the Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume, “expanding the role of the FSCP will leverage its extensive expertise and existing governance structures, avoiding the need to establish a new body to perform this role”.
Beyond providing the structure for the Single Disciplinary Body (SDB) the FSCP will also administer the adviser exam in the place of the now-defunct FASEA structure with FASEA’s other standards making functions being rolled into Treasury.
Hardly surprisingly, Hume’s announcement about ending FASEA’s role as a stand-alone Government authority has been broadly welcomed by the financial planning industry with both the Financial Planning Association (FPA) and the Stockbrokers and Financial Advisers Association (SAFAA) welcoming what they saw as a pragmatic move with respect to both FASEA and the SDB.
“ASIC has significant experience in monitoring misconduct through its regulatory oversight of licensees,” SAFAA chief executive, Judith Fox said. “It makes sense to have the discipline of financial advisers align with the discipline of licensees.”
“And it is a common-sense approach to have Treasury responsible for setting the education, training and ethical standards in the financial advice sector. This will ensure alignment with the approach to policy arising from the Hayne Royal Commission recommendations.”
