FAAA issues urgent alarm on lagging education compliance
The Financial Advice Association Australia (FAAA) has written to over 2,000 applicable members, warning them to act fast to meet the education deadline.
By the end of 2025, financial advisers who wish to continue operating are required to meet either the experience or education requirements. Those advisers who fail to do so and are still named on the Financial Advisers Register (FAR) on 1 January will be required to not only complete the education requirements but also undergo the professional year (PY).
In September, the organisation had estimated as many as 1,000 advisers could exit the profession by the end of the year which was a figure based on data and intention surveys.
Later that month, ASIC data from ASIC showed 3,459 relevant providers were yet to meet the qualifications standard and of this cohort, 1,371 may be eligible for the experienced provider pathway, but their AFS licensees were yet to notify ASIC of this.
Speaking at the FAAA annual congress in Perth, Phil Anderson, general manager for policy, advocacy and standards, was asked if the FAAA was aware whether these numbers had changed as of mid-November.
In his response, he told the audience numbers may be even higher than the FAAA had first expected.
He said: “We know a number, the latest number is 2,800 advisers whose records do not reflect that they have met the education or the experience pathway and there is a whole range of reasons why this might be the case.
“We have written very recently to all the affected members we have that we are worried about whether they meet the standard.
“We think 2,800 significantly overstates it but there’s a lot to work to be done in the next six weeks to make sure that number reduces to the lowest possible number”
Speaking to members in the audience, chief executive Sarah Abood gave a rallying cry to action.
“In most cases, we do believe you meet the education requirement but what you need to do is update the record on the FAR to reflect that because those numbers are very, very high.
“You have to act now, you have to act before 31 December and engage with your licensee if you’re in that category, let’s get onto it and let’s get it fixed.”
Providing further details on the technicalities of the FAR system, Anderson said licensees need to ensure they have ticked every box regarding their education records.
“One of those things that may have happened is they have loaded their qualifications on the FAR over the last few years but it can’t be ticked as counting towards the education standard until the full obligation is completed.
“If you have done a relevant degree or bridging course in the past but have not got to the point of assessing all the necessary training to meet the standard and ticked those boxes then that won’t be reflected in the data.”
Earlier this month, Adviser Ratings estimated that 545 advisers are a high risk of leaving the profession, while a further 583 are a medium to high risk, based on the number of advisers that have incomplete information of the FAR or still require further education.
AUTHOR
Laura Dew
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