FASEA accused of exceeding its legislative remit

21 November 2019

The Financial Adviser Standards and Ethics Authority (FASEA) has been accused of acting beyond its legislative remit in terms of both its code of ethics and expectations around degree qualifications.

The Association of Financial Advisers (AFA) has made the claim at the same time as producing an analysis weighing what the Government outlined within the explanatory memorandum attaching to the legislation and what FASEA had actually produced.

The analysis, produced by the AFA’s general manager, policy and professionalism, Phil Anderson claims that FASEA has set substantial additional education obligations for financial adviser and not adhered to the Explanatory Memorandum.

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“A detailed analysis of Chapter 6 on Transitional Provisions for Existing Providers in the Professional Standards for Financial Advisers Explanatory Memorandum clearly demonstrates that FASEA have set substantial additional education obligations for financial advisers with a relevant degree, and are expecting the completion of a Graduate Diploma, rather than the suggested bridging courses (for advisers without a relevant degree) and are not recognising many older Diploma level courses or any Continuing Professional Development as specifically referred to in the Explanatory Memorandum,” the analysis said.

“In 2017 when the Parliament passed the Professional Standards for Financial Advisers Bill, financial advisers necessarily needed to rely upon the expectation that FASEA would comply with the statements of the Parliament in the Explanatory Memorandum,” it said. “It is clear that this has not occurred, and FASEA have sought to set the education standards at a much higher level. The current model fails to adequately recognise the training that experienced advisers have undertaken during their careers.”

The AFA’s analysis comes hard on the heels of continuing criticism of FASEA’s handling of its code of ethics, particularly perceived discrepancies between the code itself and FASEA’s guidance around the code.

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How much more evidence does Minister Hume need to commence investigations into FASEA? It seems almost daily we are hearing about a FASEA related failure/mismanagement/conflict/lack of transparency. The Minister has the power to revoke the legislative powers of a body where he/she loses confidence.

that glenfield should be fired. he of all people should understand conflict of interest can be managed. I mean he worked at kpmg, one of the big four, who pride themselves on being the external auditors to the big end of town (virtually all of the ASX is audited by the big 4 accounting firms) and who make a killing selling their audit clients, non audit services (i.e. consulting) as it is a high margin business.

if they can manage the conflict of interest (in terms of the significant amount of non-audit fees earned and the quantum of the fees earned), for these public interest entities, we can do it just fine.


v.Smart FP

Is it just me or has anybody else had enough of Phil’s rants? Move on. Too little too late.

It's just you Terry.

Terry perhaps you should move on, you appear to be the type that give up a fight at the first set back, whereas for those with intestinal fortitude, getting back up and into the fray until the end is the clear choice.

Even your statement is absurd. This is topical and under review and has the possibility to be righted, so Phil, yell from the effing rooftops and bang those drums as hard as you can mate.

you should move on terry. you can't come back.

terry, please take your medication. your time has passed in this industry. please live a quiet dignified life. you have all that money. enjoy it mate.

we got this. leave it with us.

At what point will this fiasco be sorted out .... and by who. The clock is ticking .... please, someone show some leadership and defer implementation until the mess is cleaned up in a consultative manner.

The bi-product of ill considered and rushed government legislation to look good in the public's eyes. The issues with FASEA, purporting to be our ethics and standards body are beyond belief! . The ethical bankruptcy of FASEA and the fact that this dog and pony show has been allowed to go in without being reviewed simply beggars belief!

81 this is 81alpha...fire mission..danger close..over


I forgive you for thinking my comment is unthoughtful and some useless quote from a movie. But if you were not in the Army you would not know that this means the enemy has invaded our positions and we need help, at all costs.

Given we have so rigorously been pointed out the issues regarding conflicts of interests in general by government and FASEA, and that they are the root of all evil, should it really be a surprise to anyone that this happened with the education requirements after they stacked the board with various education providers throughout the process?

The representatives from the universities have a toxic conflict of interest by sitting on that board, as they stand to absolutely clean up by having the most arduous education requirements they could possibly conjure up. Its actually a scandal given that a) its an ethics authority and b) they have dreamt up standard 3. The boards ethics should be beyond reproach, its an ethics authority for crying out loud. I am amazed that the so called ethics professional on the board was never able to address this and that these conflicts existed under his watch. And yet here we are. Perhaps the board could take a leaf out of their own Standard 3 wording and permanently purge itself of education providers for a start.

Perhaps the reason these conflicts occurred under the watch of the "ethics professional" on the Board, is because he is the most conflicted of the lot, as the one with greatest potential for commercial gain. He makes money from ethics courses, consulting, and books.

FASEA severely restricted credit for prior learning in most areas when setting its education requirements. But it gave absolutely ZERO credit for any prior studies in ethics. Every single financial adviser in Australia will have to pay money for ethics training, regardless of how much they have done before. Not just money for upfront training, but also for ad infinitum ongoing training as part of the FASEA CPD requirements which are slanted to a high proportion of ethics subjects. It seems likely there will be an enormous amount of money flowing to the "ethics professional" thanks to decisions made by the Board of which he is part.

Minister Hume, are you going to condone this by standing by and allowing it to happen?

By Minister Hume not acting, she is effectively condoning FASEA's proceeses and actions and agreeing that Standard 3 is fair and reasonable.
If this were to occur , I believe that it's entirely possible that 3000-4000 advisers will simultaneously arrive at Parliament House en masse and march into the building in protest refusing to leave until they see the Minister.
No effective action from the Minister will ignite an environment that will result in nothing ever seen before from this industry.

Isn't it interesting that the licencees have been granted an extension from being responsible for advisers, yet the advisers have been left to be thrown under the bus - again.
Tick Tock FASEA & Senator Hume!!

It is advisers thar have been given an exemption from joining a code monitoring body for 3yrs whilst Treasury dreams up the Single Disciplinsry Body framework. Licensees are still responsible for ensuring advisers comply with the Code of Ethics, and reporting breaches to ASIC. ASIC just won't be monitoring Code compliance and doing the job the Code monitiring bodies were meant too! Licensees aren't off the hook.at all. Given the ambiguity & impracticality of parts of the Code Guidance, the large licensees are more than concerned with how they will monitor hundreds of advisers under their watch.

Hi Bruce, yes correct, perhaps not worded the best by me. What I am really meaning is that the an exemption for an unworkable component has been granted to the licencee (not needing to ensure we are members of a non existent body), yet ASIC/Government haven't yet gotten around to exempting us from an unworkable code.

The AFA are spot on. Board members need to jump ship fast because FASEA is a debacle the size of the Titanic and it is about to sink. In the future, MBA students at university will be told about FASEA. It will be the ultimate tale of what not to do. They have pretty much failed at every turn and they have lost the support of the entire financial planning community. It is a great disappointment because many of us were very pleased about the creation of this organisation and they could have achieved a great leap forward for our profession if they stuck to the legislation and properly researched their policies and consulted with the adviser community.

It’s funny how all these complaints about FASEA always come from the FPA or AFA.

It’s pretty obvious it’s just the same old lazy advisors complaining about the same old thing.

You have to get a degree in financial planning if you want to stay in this industry , it’s not hard nobody is asking you to do a PHD, you have plenty of time to do it, get over it and stop whinging and complaining or leave.

Hi Nathan,
Nope, I actually have pretty high qualifications, but have actually read the code and understand it is not workable. I can't own a share that I recommend to a client - conflict. I can't buy a thank you bottle of wine for a referral - that is also a breach.

Ahhh. The voice of a self righteous FASEA lotto winner.

Many of us have done far, far, more study than the content of a financial planning degree. We just did it as part of many other courses over time and have been denied recognition by FASEA. In many cases, we did some of our relevant study at real universities. Not at the glorified TAFEs which until recently were the only places to offer "financial planning degrees". Just because we object to repeating our studies to line the pockets of conflicted FASEA Board members doesn't mean we are lazy or opposed to the principle of high education standards.

Hey Nathan,
I hope you have a nice life with all your friends....you seem like such an empathetic and caring individual.
May I ask your age and years of experience in the industry please ?

Nathan, many of us conducted our rigorous learning in the school of hard knocks. Talking with, listening to and assisting real people with real issues before red tape started getting in the way and making it more onerous for everyone, clients included. We as a group didn't always get it right, there were people in this industry who did the wrong thing, but they were the minority.

In my sixties now, I don't see the value to me or to my clientele, of doing a Bachelor's Degree or a Graduate Diploma. Cost wise, it makes no sense, I lack the energy levels to get up three hours earlier to do the study - as I did when I was younger man with a young family - and frankly with a client base that needs my time, I don't have the time to commit anyway.

What galls me, is that when the day comes that you need the required standard of education (whatever date that actually becomes) my experience and prior education is worth nothing when a younger person with a professional year and a Degree suddenly becomes the expert, but with less life experience.

Over my career i have seen people able to retire comfortably due to my advice, I have seen them achieving savings goals they otherwise would not have. I have seen and continue to act for people on long term income protection claims. I have seen the children of widows or widows live financially secure, without one of their parents because I arranged appropriate life insurance for them. I am a friend to most of my clients and they in turn are friends to me.

I have seen stock-market meltdowns, mortgage funds becoming frozen assets, periods of unemployment when people couldn't afford their mortgages and much, much more.

I have passed the FASEA exam that I sat in September. I haven't shirked reasonable learning or being prepared to test myself to see if I still have what it takes to still be in the industry.

Don't you dare refer to me or other principled long term advisers as lazy. You have no idea.

Here Here Old Fella! Spot on. Yes the profession needs to improve, but this proposed improvement process is just discounting the work people have done (and for the record, I'm in my 40's having done study they are asking of people, but I do acknowledge that it should not be all 100% about a piece of paper on the wall). The fact you have done the exam in September (as did I) shows you are willing to lift the profession too.

WRONG! I have a masters in fp and I have passed the stupid exam, but I am outraged by FASEA's lack of recognition of experience and their ridiculous, unworkable BS code. FASEA is a laughing stock. No one is happy with them. The entire financial community has lost confidence in them. The only people who are happy are a handful of trolls and bitter, failed advisers who want to see our profession burned to the ground.

Nathan, I have a degree and have completed the CFP course. I'm one of the "lucky" ones who only have to do the exam and ethics course.

With regards to the FASEA Code of Ethics, can you please explain how this will differ in content from the CFP 1: FPA Professionalism unit that I have completed? And how this will differ from the FPA Code of Professional Practice which CFPs must adhere to on an ongoing basis?

Looking at the content of the FASEA course, the standards are broken in to four categories: Ethical Behaviour, Client Care, Quality Process and Professional Commitment.

Here is the course outline for CFP 1:
• Ethical decision making and judgement
• The relationship between ethics, business and professional practice
• Professional responsibility and professional accountability
• The interrelationship between the law, professional standards, ethics and compliance
• Professional compliance obligations for CFP® practitioners
• Upholding the public interest

Within the FPA Code of Conduct we can find two main categories: FPA Code of Ethics and FPA Professional Standards.

Here are the eight principles of the Code of Ethics:
• Principle 1: Client First
• Principle 2: Integrity
• Principle 3: Objectivity
• Principle 4: Fairness
• Principle 5: Professionalism
• Principle 6: Competence
• Principle 7: Confidentiality
• Principle 8: Diligence

Within the FPA Professional Standards we find PS7: Professional Obligations. Here is the content found within PS7:
• 7.1 Professional and ethical conduct
• 7.2 Influencing the conduct of others
• 7.3 Fair and honest service promotion
• 7.4 Professional Judgement
• 7.5 Conflicts of Interest and Prioritisation
• 7.6 Professional Services Charging and Renewal

PS 1 – 6 also have some areas that overlap the FASEA Code of Ethics Standards.

Given that the completion of CFP1 and ongoing adherence to the FPA Code of Professional Practice results in a standard that appears to be at least equal to, if not higher, than the FASEA Code of Ethics unit, I would expect that an exemption would be provided for the completion of this unit. Could you please detail what additional benefits I would obtain from completing the unit, and what additional benefits the completion of this unit would deliver to my clients and the community at large that are not already being delivered?

Agreed, I would have thought that the fpa1 given it's coverage of ethics, should have given you an exemption for the fasea ethics coursework at the least (which is the same theory), one would have to do the ethics exam anyway (which would examine the fasea standards). but, i think it's a question of ensuring every adviser has met the minimum requirements with no exception.

for example, we all have to do the ethics subject ( for me it's at AQF 9, i have a m.fin plan already), but even if i do the ethics subject at AQF 9 (arguably, a higher standard, using the AQF framework as a measure, than the CFP which has no AQF rating), and the ethics exam i still wouldn't be entitled to an exemption from CFP 1 because they are using the same principle, i.e. all advisers who are members of FPA should meet their standards even if the standards they have already met, already exceed that of the FPA's, i.e. m.fin plan at AQF 9 (13 subjects including fasea ethics) plus the fasea ethics exam.

so it goes both ways.

Well put JK. FASEA's refusal to give credit for any prior ethics training is indefensible. And it's not just CFP1 that has been arbitrarily dismissed by FASEA as worthless. Many advisers have done other university subjects in ethics and are still being forced by FASEA to pay up for additional ethics training. The excuse that "the FASEA Code is new so no-one has been trained in it" is laughable. Everyone has to study the specific FASEA Code independently anyway to pass the FASEA exam. And the whole point of ethics training is that it should be broad enough to apply to a variety of situations as they arise, not anchored to a specific code at a specific point in time.

Given there is no sensible, valid, reason for FASEA to refuse RPL for any prior ethics training, attention must be focused on the role played by a FASEA Board member who makes money from ethics training. Clearly he is conflicted. The big question is whether he is also corruptly abusing government bestowed power. Either way, the government needs to intervene and remove this conflicted individual from the FASEA Board and overturn FASEA's decision to refuse any RPL for prior ethics training.

what you accuse fasea of doing, is also being done by the fpa. they don't allow credit for cfp 1 either

Did some of these associations wake up post 30 June and realised there members have walked away and so finally we need to make some sort of a comment. Let's see 2 years too late. Like what's going. I was screaming about this 3 years ago and I'll I heard was AMP or FPA will do it for us. Oh wait, sorry, figured it out... of course there a bit grumpy because they're not a code monitoring body and so finally they've realized there becoming irrelevant and they've lost revenue and compulsory membership.

Adam, you were right to call out these issues 3 years ago. The associations were certainly far too slow to adapt to the new world and still have a way to go. But they are getting better. They are gradually doing more and more of the things that people like you were asking for 3 years ago, and people like me have been asking for for much longer than that.

But do you really think the best way forward it is to constantly carp and moan about the failings of the past? Do you really think it helps anyone to be constantly crowing "I was right, you were wrong"? Do you really think advisers will be better off having no-one represent our interests in Canberra, because our associations got things wrong in the past and still aren't perfect?

Perhaps your rage might be better targeted pointing out the specific current issues where our associations could still improve, rather than criticising the good things they do now because they didn't do them fast enough.

Well done Adam for calling it out 3 years ago. I'll put my hand up and say that yes I expected the FPA etc to make sure things were workable.
I only 'came to the party' in the last six months, but what is most frustrating is that I've been communicating direct with FASEA on a number of matters and nothing has changed. Even when items were raised with them months before their 'guidance note', they were not addressed/incorporated - instead the clock ticks and we all get more stressed. I know FASEA are only a small organisation (government's issue re funding choices, not advisers), but I'd imagine that excuse wouldn't fly as a defence for an adviser in front of ASIC if we said we didn't have time to look at something.
Keep up the fight everyone!

God help us all

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