In a submission to the Financial Standards & Ethics Authority (FASEA), consulting business AccountantsIQ said it strongly recommends that FASEA expand the list of approved degrees in terms of both the number of institutions offering approved qualifications as well as the number of approved majors or areas of specialisation.
FASEA must recognise that not all financial advisers provide traditional personal financial advice and, as such, must be catered for separately with an appropriate education pathway and recognition of their different knowledge and competencies, the submission said.
“The existing Financial Planning Education Council (FPEC) list of approved degrees is currently limited, in that it favours Financial Planning majors. This is appropriate for many advisers, but not all,” the submission explained.
Further, the submission said there are many courses that would qualify as approved degrees, but the education provider who currently offers that course has not yet had it placed on the FPEC list.
“AccountantsIQ understands it is the responsibility of the education provider to do this, yet we also suggest this is not necessarily known by the relevant departments within education providers,” it said.
It also said it is seeing accounting practices currently supporting staff in their businesses, both financially and practically, who are currently undertaking studies in order to be able to provide financial advice.
“However many courses of existing ‘students’ are not currently on the FPEC list,” the submission said.
“It is vital that these qualifications get onto the FPEC list and actually meet the new FASEA standards for both ‘approved’ degrees.”
The submission noted that for new entrants four knowledge areas will be required for a Graduate Certificate course, 8 for a Post Graduate Diploma course and a further 4 for Masters’ attainment.
“The range of knowledge areas appears to be based on an FPEC list which has a strong financial planning flavour, but the areas of operation of financial advisers pursuant to an AFSL are far wider than just the financial planning industry,” the submission said.
“The current suggested knowledge areas for new entrants do not seem to consider those entrants who do not want to do down the financial planning path, yet still require an AFSL.”
Examples of these advisers include advisers who specialise in SMSFs, prepare information memoranda for investment offerings, prepare independent expert’s reports for takeover matters, advise on mergers and acquisitions and provide independent accountants reports, the submission said.
“This is no different for accountants, so once an accountant has satisfied entrance requirements to either CA ANZ or CPA Australia’s programs, and has then completed that level of post-grad qualification, many go on further to specialise in a field that requires an AFSL — limited or full,” it said.
“All of these specialist areas require subjects to recognise their knowledge areas and required competencies yet have little need for specialist knowledge about financial planning. Accordingly, FASEA must accept the different pathways these advisers already have used, and are utilising for existing staff, to obtain the necessary training to specialise in their chosen fields.”
Bureaucracy gone absolutely crazy. The SMSF sector is stuffed which is a pity considering how well it was operating previously with genuine professionals building careers in a very efficient sector. Trustees are not going to wear all these additional costs and will look to other alternatives.
FASEA’s charter was to set minimum standards not aspirational standards. This seems to have been forgotten.
Wow, someone putting a logical proposition into this debate.
However we cannot have that sort of reasonable logic being used, as that would break up the cosy little cartel that we have building up here with this legislation and the FASEA way of doing things.