...raising the bar on financial advice
The FASEA Standards are a cornerstone of the Corporations Amendment (Professional Standards of Financial Advisers) Act 2017 which established the Financial Adviser Standards and Ethics Authority (FASEA) with the responsibility to set the education, training and ethical standards of licensed financial advisers in Australia. The majority of these new requirements came in to effect on 1st January 2019.
FASEA issue standards and the Code of Ethics, with which all financial advisers must comply, outlining their ethical obligations to their clients and educational standards or pathways that new and existing advisers must meet in order to comply with the requirements in the Corporations Amendment (Professional Standards of Financial Advisers) Act 2017. These Standards include the requirement to pass the national FASEA Financial Adviser Exam.
What are the FASEA Standards?
- New Entrants are required to hold an Approved Degree before they commence their Work and Training (Professional Year) requirement. They must be mid way through their Professional Year before they are eligible to sit the Financial Adviser exam and commence using the term Provisional Financial Adviser or Provisional Financial Planner.
- The annual requirement for 40 hours Continuous Professional Development commenced on 1 January 2019. Provisional Financial Advisers will be required to undertake CPD after completion of their Professional Year.
- Existing Advisers have until 1 January 2022, to pass the Financial Adviser Exam and until 1 January 2026, to reach an education standard equivalent to an Approved Degree.
- The Code of Ethics will commence on 1 January 2020, with all Financial Advisers required to adhere to the Code from that day onwards.
What does it mean by “Existing Adviser” and “New Entrant”?
An ‘Existing Adviser’ is defined under the FASEA Standards is:
Financial advisers are an ‘existing adviser’ if they:
- have been ‘current’ on ASIC’s Financial Advisers Register (FAR) at any time between 1 January 2016 and 31st December 2018; and
- were not prohibited from providing advice on 1 January 2019 (either through a banning/disqualification/ enforceable undertaking); or
- at any time between 1 January 2016 and 31st December 2018, they provided personal advice in a foreign country to retail clients in relation to relevant financial products; and
- are not prohibited under the law of the foreign country from providing such advice on 1 January 2019.
If a person is an ‘existing adviser’, they will need to meet the following requirements:
- Pass the Financial Adviser Exam by 1 January 2022.
- Complete an approved qualification by 1 January 2026.
- From 1 January 2019, meet continuing professional development requirements.
- From 1 January 2020 comply with the FASEA Code of Ethics.
An ‘New Entrant’ is anyone wishing to commence a career in financial advice on or after 1st January 2019. For New Entrants, they must:
- complete a FASEA approved degree;
- undertake a Professional Year; and
- pass the national Financial Adviser Exam.
New Entrants must complete a FASEA approved bachelor degree (AQF7), a post graduate diploma (AQF8) or masters degrees (AQF9).
A New Entrant must pass the Exam before commencing Quarter 3 and 4 of the Professional Year.