Hume’s office confirms Govt backing for FASEA rules

The office of the Minister for Superannuation, Financial Services and the Digital Economy, Senator Jane Hume is leaving financial advisers in no doubt that the underlying rules laid down by the Financial Adviser Standards and Ethics Authority (FASEA) remain in place irrespective of FASEA’s functions being devolved.

A financial adviser who wrote to Hume’s office this month questioning recent statements by the FASEA chief executive, Stephen Glenfield, and asking “what happened about sorting out FASEA” received a formal reply which left him in no doubt that nothing had really changed in terms of the Government’s expectations of financial advisers, including passing the exam before the end of this year and gaining an appropriate tertiary qualification.

The following represents the letter sent to the adviser questioning the fate of FASEA:

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“The Morrison Government is committed to raising the education, training and ethical standards of financial advisers. The Government undertook these reforms in response to the urging of the industry itself, who raised concerns with the prior education and training requirements for financial advisers and expressed a desire to professionalise.

“These reforms aim to engender change in the industry to transform it into a true profession that consumers have trust and confidence in, while maintaining the affordability and availability of advice.

“The compulsory education requirements cover a defined body of knowledge intended to underpin the profession and the professional’s capacity to competently practice. Like the medical and legal professions, the new model for the financial advice profession will ensure that all advisers have the same base of general knowledge, regardless of whether or not they choose to specialise.  Professionalising the financial services industry requires lifting the bar for education requirements for all advisers.

1.       The Government also recognises the need to ensure existing advisers have sufficient time to meet the new standards. In June last year, the Government passed legislation to provide additional time for existing financial advisers to meet the qualification and examination requirements set by FASEA. Existing advisers must complete the exam by 1 January 2022 (one additional year) and meet education requirements by 1 January 2026 (two additional years). Existing advisers are able to attempt the exam in every second sitting, and so with six exam sittings scheduled for 2021, advisers who have yet to pass the exam still have three attempts in 2021 to pass the exam, provided they enrol in one of the first two sittings in the new year.

2.       Unsuccessful candidates are able to resit the FASEA exam and these candidates receive guidance on which knowledge areas they need to improve to enhance their ability to pass at a future sitting. If a candidate has clearly underperformed on one knowledge area versus others, they receive advice to revise that particular area. If a candidate has underperformed across all areas consistently, they will be advised to revise all knowledge areas.

The Government is aware that, in some cases, advisers will be impacted by the reforms and will have to manage their professional and personal demands while also undertaking further study. This is why we have taken the steps to provide additional time for existing advisers to fulfil these requirements.

It is also why the Government has provided for appropriate recognition of the experience of existing advisers. While new entrants must complete an approved bachelor degree (24 subjects) or above or hold an equivalent qualification, existing advisers need only complete an 8-subject graduate diploma (at most), in recognition of the experience of existing advisers.

You may be encouraged to hear that the Morrison Government has announced that we are streamlining the number of bodies involved in the oversight of financial advisers, resulting in FASEA being wound up. The Government will also move the standard-making functions of FASEA to Treasury, with the standards to be set by legislative instrument. Remaining elements of FASEA’s role, including administering the adviser examination, will be incorporated into the mandate of the Financial Services and Credit Panel (FSCP) within the Australian Securities and Investments Commission (ASIC).

To be clear, existing advisers must still complete the exam by 1 January, 2022 and meet the educational requirements by 1 January, 2026.

The Government believes there is reason for optimism in the sector. While the scale of changes the industry is undergoing can be challenging, ultimately, strengthening the financial advice sector will benefit all Australians, as they will be able to access better quality advice that is affordable and helps them make good financial decisions,” the letter said, finishing on the note that “Hopefully this information will be of assistance”.

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And so they should... if you havent got off your backside and started studying, done the exam etc etc that is on you. Sympathy for the older advisers for sure... but this has been coming for ~10 years. You have to put a line in the sand somewhere.

......but a 24 unit Bachelor of Business (Financial Planning) degree requirement for older advisers ????

All communication from FASEA has been quite clear that older advisers with no tertiary qualifications need only do an 8 unit Grad Dip. This article repeats that.

If older advisers still think they need to do a 24 unit Bachelor of Business it suggest they have fundamental cognition and comprehension problems. They are a danger to their clients, and should retire now regardless.

An 8 subject Graduate Diploma will suffice. There are also credits available for some subjects in the Grad Dip depending on what undergraduate study was done.
That's not the issue though. Many are getting hammered at the first hurdle - the exam.

Indeed the RG146 education standards have been woefully low since that level was required in 2003.
Whilst I fully support raising standards it’s been a complete hatchet job. Right policy, terrible implementation.
FARSEA started 3 years ago saying no degree older than 10 years counted for anything, everyone back to Uni start again. That position alone proves how freaking crazy these bureaucrats are.
Followed by years of pushing for recognition of prior learning. Prior Govt Uni degrees, specialist training etc. It shouldn’t have been this hard.
As for 120 hrs costly time wasted on Ethics course, seriously what a load of padded out garbage, for a Code that is non workable in the real world in current form.
Being forced to do Ethics courses by politicians and ASIC, the height of hypocrisy.
And no senior Bank, Life Co, ASIC, Pollie, Super Trustee, etc that caused the RC has to do it do they ? These criminals need Ethics training the most.
Finally the total lack of recognition of years of Real Advice experience is disgusting. Forcing 55 + years olds to waste years studying with not long enough pre retirement to get a return on wasted time is beyond sad.
How about ALL FARSEA, Pollies, ASIC, Super Fund Trustees, Bank execs, etc ALL be put through the same process.
Let’s have some Ethics and share this rubbish all round.
Back to Uni and Ethics courses MIA Jane. NOW.
And pass a bloody exam too.
Maybe then will you understand the massive time costs imposed and please explain how that makes Advice affordable.

Well said Ben!! You almost covered all the "criminals", except those individuals past or present on the FASEA Board that have a clear conflict of interest in benefiting from the requirements for completion of bridging courses (mandatory Ethics) or a Grad Dip. Oh, we still don't have any oversight into how much FASEA paid ACER to administer the Exam, in many cases without the expense of physical exam venues due to COVID as many took the exam online. Given the fact advisers had to pay $594 for each sitting themselves (and the same if they failed), once wonders where all the $$$ went?

Some of those "criminals" will continue to profit from their corrupt abuse of position on the FASEA Board long after FASEA is wound up. This is due to the mandatory CPD requirements they created. Ethics courses are a particular rort in this regard, requiring nearly twice as many mandatory CPD hours as other specialist areas. How frequently does ethical theory change compared to tax & superannuation legislation or investment markets??

I cannot imagine too many established and experienced adviser would not have at least the AQ6 level old Dip or as was later the Dip and ADFP. I was given 2 exemptions and had to do 6 topics to get through. I'm not sure why you'd need to do 24 unless you're brand new and starting from scratch.

What upsets me is the little comment at the end about 'advice that is affordable'. This government is hopelessly out of touch.

Affordable Advice is trumpeted as a key goal but everything the Govt, LNP and ASIC do is the exact opposite.
Oxymoronic lip service to Affordable Advice.
More BS Regs, More BS costs, more BS Red Tape at every turn. How does that make Advice Affordable ?

The article says........"It is also why the Government has provided for appropriate recognition of the experience of existing advisers". Imagine my dilemma:-
- 41 years industry experience without even one customer complaint
- 23 years in corporate practice
- 18 years in private practice
- Bachelor of Business (Accounting)
- Bachelor of Business (Commercial Law)
- Diploma of Financial Planning
- Diploma of Finance
But yet I have been instructed to complete a further 4 tertiary level "Bridging Units" to be deemed "Professional" and to be remain "Licenced" past 1 Jan 2026.
I would respectfully suggest that there are thousands of knowledgeable advisers with decades of knowledge, skill and experience about to exit the profession which will create a chronic undersupply of advisers, but ultimately a prime business opportunity for those remaining to absolutely ramp up their "Fee for Service" purely because they will be able to charge like the lawyers who wanted this. This is all at a time when government want's "affordable advice for all" without understanding that financial advice is not like a 10 minute consultation with a local GP about a sore toe (i.e. telling someone to "spend less than you earn". There needs to be some better recognition of prior experience, education and practical skillset. The new structure is perfectly imperfect and needs to be better thought through.

100% Agree Rob. After the next financial crisis when people have lead their decisions by greed, regardless of our good advice, and lost money, the bureaucrats will say "How did this happen? We made financial planners get a Post Grad Dip! Doesn't that stop markets from falling, interest rates from rising, economies from failing? Why do these financial planners keep causing global financial crises?" And guess what, markets will keep going up and down, and economies fail but we can only do the job to the best of our abilities. These regs are pushing OUT good, experienced advisers. They will become Centrelink Consultants or such and no one with any experience of getting clients through the crises will be left. But the bureaucrats will shake their heads and say "I don't understnad how this happened, we made them get a higher education that an Accountant or Lawyer.......".

wait for it they will increase access for intra fund advice because their isn't enough advisers... call center staff giving financial advice with a crave out...

i replied on humes twitter account 112 times about the carve out......crickets me thinks they are scared if they tackle ISF ponzi scheme Labor will hit back hard when govt changes hand. I think its a back room deal, you leave our piggy bank alone and we wont put more weights around advisers necks.


DICK HEADS, GOOGLE MARKET RISK. you cannot diversify from it. it's the consumer's responsibility to assume that risk, it's called being alive, which is RISKY in and of itself.

in foolish western countries, people assume living is guaranteed, and it's someone else's job to do that, it's not, it's up to the individual to navigate and survive or fall, you have to survive life. no one can eliminate the human condition for consumers.

Only Pollie's & Bureaucratic Canberra bubble morons could possibly say you are not qualified in every way shape and form.
So bad are these clowns.
So far away from Real World Advice and clients.

Yet, you never thought that doing a degree might have been in your clients interests? I decided the only way forward was to do a Masters of FP and completed in 2012. There was plenty going on, moved to new license and started new business, recovering from GFC. i still managed to get it done instead of making excuses. It is the lack of pro-activeness that has seen all this foisted on the entire profession.

Well done Wonder Dog - you have completed the best qualifications available to you "at the time". In a few decades, your qualifications will start to look at little old and certainly, will be very dated and perhaps completely outdated. Will you then be willing to re-do more up-to-date qualifications so that you can continue to work in the clients best interest or will you be relying on some outdated qualification 30 years old?

2012? That will be out of date next year. Hope you're getting ready to do it all again to further enrich corrupt course providers.

Rob, I feel for you - I really do. I would assume you are in your 60s, either you are getting close to retirement or you dont wish to retire. I admire you regardless. You have 2 degrees, obviously you know how to study, even though it may have been awhile. You can do it. 4 subjects in 4 years. Easy. Sit the exam, most are passing. You got this.

Very nice comment Changemaker. I completely agree with your summation of Rob. One subject a year Rob, plenty of study groups around you could join to help.

Why should Rob be forced to do more study ?
Please explain how or why this will benefit anyone other than fees paid to Uni’s ?
Sure RG 146 was crap and needed to rise years ago. But to punish and forced crap on highly educated, highly experienced Advisers is so freaking wrong.
Please explain the benefit ?
Do the exam Rob, it’s crap and wastes a good 3 days to make sure you don’t fail and another half day sitting it. That gives you another 4 years to plan an exit. If I was you I’d refuse to do the extra study.
Ps - wouldn’t a relevant degree plus full DFP give yourself 7 credits. And this only have to do the rubbish padded out FARSEA ethics crap course ?

Grow up BS. Such a rebel. Not constructive at all.

How is Rob unqualified or uneducated ?
How can FARSEA justify its self when these Adviser are no longer qualified ?
Yep these FARSEA clowns started out 3 years ago saying any degree (from Govt bloody Uni’s) older than 10 years count for nothing, all start again.
How the fu#k can a Govt body totally disregard Govt Uni Degrees ? It has been a total disaster implementation, of the right policy.
You grow up clown as FARSEA has been anything but constructive.
Look at Standard 3, corrupt ASIC pays for conflicted academic comments and choice to rule ALL conflicts must be avoided. Completely unreal world utter crap, in a totally unethical, corrupt and conflicted process.
And the majority of FARSEA Code also remains so far from the real world of real advisers.
Real constructive FARSEA are, FFS it’s disgusting.

time to move on champ

Advice will not be affordable nor accessible. Government is hell bent on making reforms which are ideological.

Under the current idealogy, you won't be able to 'prove' a client with less than 2M shouldn't be anywhere else but a multi-manager fund, preferably industry or at least one of the big 10 that we will end up with, and you can charge an hourly fee for strategic advice which the clients only with the available cash and complexities will pay, and it won't be annual fees, it will be as needs be. So advisers become strategy initiators, or ambulance chasers like many lawyers, working case to case to fund it all.

the best thing everyone can do is not to delay the inevitable. the economy is tender, "the drums of war are beating", china is going to start putting huge tariffs on our iron ore the minute they can source a new supply route which they are furiously working on. this is the only source of our balance of trade surplus.

it is inevitable that a conflict will eventuate between the U.S. and China and Australia is likely to be a part of that conflict in support of our allies.

we can add to that by all of us resigning before the S$$t hits the fan, so to speak, help yourself and help everyone else by collapsing the whole thing.

they want us gone, well let's leave them with a massive headache they might not have forecast.

here you go, you fix it Jane. see ya

spot on. the other thing most advisers don't realize is that it is not just you and me that is becoming less and less viable. most dealer groups won't' survive either as it is already increasingly evidenced by their closures.

they will need about 350 advisers on board to survive based on a fee-for-service model, many just don't have that many advisers so they will also fold.

and this is our chance to collapse the whole thing too and give everyone a BIG KICK IN THEIR TEETH.

Yep. The kick in the teeth will come when they have done the same thing to Mortgage Brokers which is also inevitable. Then when they have no one else to blame and f over for their own gain then in comes decentralisation via crypto to end them - both pollies and large instos.

oh, they are going to cream the mortgage brokers, their trial will be gone by 2022 (this is already legislated just deferred until 2022), and they will also have to do a fee for service (which won't work) and annual review and do a record of advice probably to prove they did the annual review. if they don't then the lender will cancel out the trail. they also have a 18 month to two year clawback when they first write the business.

they also had a BID introduced and became operational from 1 Jan 2021 so they are screwed too.

haha mortgage brokers your nightmare has begun.

last but not least, they need to start on accountants too.

Yep, the LNP and ALP will destroy anything small and independent to keep at bay the big banks and their colleagues in big government and big media that play both sides for their own gain.

and your point about Accountants is spot on as well. You just look at the moronic lobbying that those accounting bodies took part in to join the fray and s..t can financial advisers with the aim of incorporating that market share for their constituents without realising that the same game will be played against them. Then when all the small/medium players there are gone, big tech will come in and wipeout the banks. And guess what, they will play the same game against them that the big banks played against everyone else.

Decentralisation will win in the end but only after these morons have done everything they can to hamstring it and therefore the economy in the meantime - while the rest of the world leaps ahead of us.

And pollies like Hume will be long gone on a lifelong pension based in FIAT currency worth F All.

Yes, I think the blowtorch will be applied to accountants very soon. SMSFs are rapidly becoming the biggest competitor to union funds, and most of those SMSFs are being recommended by accountants. (Often without a licence, and usually inappropriately). The unions will soon use their influence over politicians, regulators and the media, to attack accountants and SMSFs.

What a shame there isn't a compulsory ethics requirement for government ministers and employees.
That would preclude a lot of the lying bastards from the top down including those who demand more of advisers doing more for the general population than politicians ever will!

Exams & Ethics 120 hr courses required for sooo many, yet not forced too. Just blame and kill Advisers instead
- Politicians, what a sad joke with zero ethics.
- ASIC & APRA found so wanting over 10 plus years, total Regulatory Capture Corruption to Industry Super, zero ethics.
- Bank & Life Co. managers and Execs that caused the RC.
- Super Fund Trustees, etc.
Should all be forced to meet similar FARSEA exams, education and Ethics.

The time and effort it took the person to write to their MP they could have completed two AQF Level 8 subjects. Too late to fight this now, what we should be fighting for is better representation so that these mistakes don't happy again. A line in the sand was drawn and if we don't do any inner reflection as an industry then all those deaths and lost jobs are for nothing. That's why I believe the entire board at the FPA needs to resign and hang their heads in shame.

They’ve already got well paid jobs now or in the near future with the instigators of this mess.

Actually it took two quick discussions over 6 months, & 3 minutes to type the follow email. Those 8 units will take me about 8 months of work time (about $200,000 worth) I will never see again (for no good reason). Spare me the baloney buddy.

1 month of work time per subject? That's over 160 hours. Competent, experienced advisers can knock them over far quicker than that. They can also offset 30 hours per subject against their 40 hours pa CPD requirement that all advisers have to do anyway. If you start a Grad Dip soon and take it gradually, it will effectively exempt you from most of the next 5 years of CPD.

Actual course costs are only around $1,500 - $2,500 (tax deductible) per subject depending on where you do it.

I said this about a year ago, get in and make hay while the sun is out ( 3 years ) and then run

if there's still ppl complaining about the exam and study with all the extensions etc than maybe youre just lazy. The real issue is how do adviser make money with teh cost of doing business and all the compliance burden, along with the cost associated with making a mistake. Why upskill your education if the reward is still not commensurate with the professional qualification?

The funniest thing is that the big 4 is employing fresh graduates or people still at Uni to review and coach advisers when they fail the pre-vetting and audit reviews for compliance. The dumbest thing is that someone who left the industry with degrees and years of experience is considered a new entrant? its like they are smoking crack

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