With exactly one month to go before the Better Advice Bill regime comes into effect, you'd expect some clarity on many of the key changes it entails.
Perhaps most importantly, you'd like to know the details concerning how Treasury and ASIC will jointly assume stewardship over FASEA, the education standards body whose introduction in January 2019 arguably precipitated a steady exodus of advisers from the industry that shows no signs of stopping anytime soon. We know that Treasury will be responsible for any future amendments to FASEA standards as well as any broader changes to adviser education policy, but it's ASIC that will handle the day-to-day business of exam administration and disciplinary matters.
Given the tremendous influence FASEA has had on the advice industry, one would hope for a smooth transition to the new system – but that's appeared decreasingly likely since Treasury heralded its closure late last year.
Attempting to get a clearer picture on these issues, LNP MP Bert Van Manen asked ASIC representatives what their post-FASEA plans were at a parliamentary committee hearing late last week.
"The Financial Services and Credit Panel," he said, "is going to be replaced, effectively, with a single disciplinary body. What work is ASIC doing presently to ensure a smooth transition from 1 January and to deal with some of the outstanding issues that have been there, particularly in terms of FASEA and its guidance around the Code of Ethics?"
In response, ASIC commissioner Danielle Press noted that any changes to the Code of Ethics will be Treasury's responsibility, adding: "I would like to assure the committee that we are working very closely with Treasury and FASEA to ensure that there is a smooth transfer of these responsibilities.
"There are very expansive obligations now on ASIC under the Better Advice legislation. We are working towards how we convene the panels and how we will look at the issues, and we will be putting that to industry when we can, probably at the very early part of next year."
Even though ASIC's new obligations under the Better Advice legislation kick in on January 1st, Press continued, "we won't see those papers coming through for some time."
Regarding the future of the adviser exam – which she acknowledged was "of great interest to the financial planner community" – Press said ASIC is working with the Australian Council for Educational Research (ACER) on a new contract.
She added that while the contract has yet to be signed, it will likely happen in the next few weeks. Once that's done, ASIC will be able to tell the industry when the next round of exams will be.
"We are looking to have probably four exam sittings in 2022," she said, "and those people who qualify for the extension to 30 September to pass the exam will have three opportunities to do so before September."
That there are still so many uncertainties regarding FASEA's future - particularly as they pertain to exam sittings – should be concerning to those advisers who've elected to postpone taking the exam until 2022.
As AFA general manager policy and professionalism Phil Anderson previously noted: "Say they decide that the need for doing the exam largely sits with new advisers. Then what? It certainly won't be run as frequently as it is now. It might be months before you can sit an exam. What happens to your clients in the meantime? That could be disastrous for certain business models."
If nothing else, ASIC's comments at the committee reinforce the importance of getting all your FASEA boxes ticked sooner rather than later – because it's unlikely we'll be seeing the full picture for quite some time.
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