The final transition plan to the new Financial Adviser Standards and Ethics Authority (FASEA) regime needs to place just as much of a focus on retaining existing advisers as it does on raising education standards, according to the Association of Financial Advisers (AFA).
In a statement issued following Tuesday’s release of upgraded transition pathways guidance by FASEA, the AFA expressed concern at the impact that continuing levels of uncertainty were having on the financial adviser community.
“We are also concerned about the potential for a significant loss of highly skilled and experienced advisers. These advisers are contemplating retiring early rather than complete education where they question the relevance to their area of specialisation and the cost and time impact upon their businesses and family,” the AFA statement said.
The organisation said that, on this basis, it would be arguing that the final transition plan “needs to place a high priority on retaining existing advisers as much as it is focussed upon raising education standards”.
“We will also argue that advisers should have the opportunity to do study in an area that will add value to their business and recognise their area of expertise,” the AFA statement said.
However, at the same time as issuing its words of caution, the AFA acknowledged that the latest FASEA announcement had provided greater clarity, noting the key changes as being:
• Clarification of the three subjects that will make up the bridging course.
• Establishment of a different category for advisers with both an undergraduate and a post graduate degree in a related discipline, who will need to do a single subject on the FASEA Code of Ethics.
• Confirmation that even advisers who have an approved financial planning degree will also need to complete the FASEA Code of Ethics subject.
• A requirement that all advisers with an unrelated degree will need to do an eight-subject graduate diploma, however recognition that their previous study should enable them to get more exemptions.
• Confirmation that the age of a relevant degree will not be a factor and all relevant degrees, no matter how old, will count.
At the same time the SMSF Association described the upgraded pathways guidance as being “a crucial step forward” for existing financial advisers with its chief executive, John Maroney suggesting the guidance proposed more flexibility and gave greater recognition to adviser’s prior education, reflecting the fact FASEA had been listing to industry feedback.
He said it was a “sensible and welcome outcome” that existing advisers who had undertaken formal education in related fields and relevant post-graduate study would only have to complete a small amount of study to meet the new required legal educational standards.
“This is an improvement from our initial understanding of the FASEA standards and is a positive outcome for advisers who have a degree in a relevant field, as defined by FASEA, and have chosen to increase their knowledge by further education,” Maroney said.