Responding to the new education standards being deployed across the advice industry, ASIC is proposing to introduce new competence requirements for advice licensees.
Explaining the proposed changes, ASIC commissioner Danielle Press said they were "designed to strengthen the organisational competence of financial advice licensees by ensuring that advisers are supervised by at least one responsible manager who satisfies the new education and training standards."
As per Regulatory Guide 105 Licensing: Organisational competence (RG 105), advice licensees are required to "nominate responsible managers who will have direct responsibility for significant day-to-day decisions about the licensee's financial services business."
In order to demonstrate a responsible manager's knowledge and skills, there are currently five options available. These are:
The fifth option is more complicated; essentially, if the responsible manager isn’t relying on options one through four, they need to provide a written submission which will satisfy ASIC that they have the appropriate “knowledge and skills for their role.”
ASIC wants to introduce a sixth option to the above. This would consist of a knowledge component comprising the new FASEA exam as well as FASEA’s degree and CPD requirements. The skills component would be three years’ relevant experience over the past five years.
The changes are open to consultation from industry participants. ASIC wants to know if there are any elements in the proposed changes that shouldn’t apply to responsible managers; whether other elements should be added; whether there’s a better way for option six to reflect FASEA standards; whether the skills component is fair; and whether there’s a better way to satisfy the updated requirements.
“Our proposal seeks to achieve a balance between requiring responsible managers to achieve and maintain the standards expected in the industry,” ASIC explained, “while avoiding any unnecessary requirements.”
As above, all of the proposed changes are currently open for consultation. You can read the relevant paper here.
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12 September, 2019
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