The Financial Adviser Standards and Ethics Authority (FASEA) regime, continuing professional development (CPD) standards and time-table are discriminatory against part-time advisers particularly women and older advisers, according to life/risk-focused dealer group, Synchron.
Synchron chair, Michael Harrison has also accused FASEA of having a double-standard, having taken 18 months to determine the draft standards for the industry while not commensurately extending the implementation time-frame.
“While on face value the CPD standard put forward by FASEA appears reasonable for full-time financial advisers, the requirements will make life difficult for part-timers, many of whom are women, and also for older advisers,” he said.
"We believe advisers who work part-time and flexible hours will not be able to complete the required study within the timeframe FASEA is proposing and still maintain a high standard of service to clients," Harrison said.
"We recognise that financial advising is attractive to women who want to balance their work and family commitments, particularly those who want to run their own businesses and believe the proposed requirement will therefore have a disproportionately negative impact on female advisers."
Harrison said the requirements would also negatively impact on older advisers who had extensive experience and considerable skills but no formal university qualifications.
“Our concern is that these highly skilled and experienced advisers will find it very difficult to maintain these hours when, more likely than not, they will also be required to study for a degree,” he said.
Harrison said that while many older advisers wanted to work well into their later years consistent with the Government’s rhetoric around wanting people to work longer so that they are less of a burden on Australia’s welfare system, the FASEA reforms might force an estimated 5,000 plus advisers out of the industry.
“There will of course be a flow-on effect to support staff who will also lose their jobs. The exit of so many people from the industry will not only result in unemployment, it will increase the cost of advice, potentially making it prohibitive for many people to access.”
Harrison said Australians had to have access to financial advisers who were ethical, experienced, appropriately qualified and committed to putting the interests of their client first but that “the FASEA proposals as they currently stand will force risk advisers in particular to study for a degree that is largely irrelevant to their day-to-day operations”.
Mr Harrison was also critical of other FASEA proposals on other grounds, including:
• Minimum and overly prescriptive standards of higher education
• Inadequate recognition of experience
• No differentiation between different disciplines - e.g. risk only advisers
• An unrealistic and unfair implementation timeframe