Notwithstanding all the negative publicity which has surrounded financial planners over the past five years, cross-bench Senators in the new Parliament would be acting unfairly if they denied those planners a full two years to prepare for and sit the Financial Adviser Standards and Ethics Authority (FASEA) exam.
When the chief executives of the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA), Dante DeGori and Phil Kewin, had their first meeting with the newly-ensconced Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume, the timetabling of the financial planner exam was, quite properly, one of the priority issues they chose to raise.
And Hume, if she is to be entirely fair, will support the industry’s calls for planners to have a full two years to prepare for and sit the exam not only on equity grounds but because it will ensure that the original intent behind the underlying legislation is fulfilled.
What needs to be understood about the situation facing financial planners is that the amount of time taken by the FASEA to put the exam logistics in place has served to compress the two-year timetable originally announced by former Minister, Kelly O’Dwyer. At best, the originally promised two years has turned into 18 months.
The problem, of course, is the inflexibility inherent in the fact that the dates by which existing advisers are expected to pass the exam – January, 2021 – have been embedded in the legislation. This approach may have played well amid the anti-planner sentiment which surrounded the Minister’s first-reading speech but it looks decidedly impractical today.
A more practical approach would have been to cite January, 2021 as a target date within the legislation, but to have allowed some regulatory flexibility on final implementation dates in recognition of the substantial challenges which were always going to be encountered by a body such as FASEA.
It is in these circumstances that the united call by the FPA and the AFA on behalf of their members is not a call for special treatment or an attempt to avoid the requirements, it is simply a practical reminder of what was originally promised and the benefits which will flow from maximising the number of advisers who can and will pass the exam.
One of the realities which no one has cared to dispute is that there is growing demand for good financial advice and that this demand is occurring at a time when upwards of 30 per cent of advisers are likely to leave the industry as a result of the FASEA regime and an end to grandfathered commissions.
Therefore, if the Government does decide to recognise the industry’s calls for an extension to the exam timeframe, the Senate cross-benchers should give any legislative amendments a sympathetic hearing in the knowledge that it will ensure more competent advisers remain in the industry.