Suzanne Haddan, managing director of BFG, with Deen Sanders (OAM), chief executive of FASEA, and Joanna Bird, senior executive leader, financial services, ASIC.

Financial advisers will have the opportunity to comment on proposed education and ethical standards after the official standards body confirmed its guidance on a number of matters, including bridging options and relevant degrees.

In a paper released on the Financial Adviser Standards and Ethics Authority’s website, it was confirmed it was seeking feedback on the “relevance and application of the proposed guidance and how the adviser community might be supported in adopting the requirements”.

Speaking at the Australian Securities and Investments Commission annual forum on Tuesday, FASEA chief Deen Sanders provided further detail on FASEA’s “proposed guidance on education pathways for all advisers” and the first draft of the long-awaited FASEA code of ethics.

“This is about building a professional system and putting in place a framework that supports the professionalisation of financial advice,” Sanders said.

Sanders declared that the essence of the good professional regulation was based on “two primary engines”.

“The first is what we expect people to know – that’s the issue of competence,” he said. “In addition to the knowing component, there’s also the doing component. When you have expectations of your particular advisers, no matter what field they’re in, you expect them to know certain things and you expect them to act in certain ways.”

“Essentially what you see on our website today are those two primary engines,” Sanders said.

Sanders also referenced the challenge FASEA is facing in “structuring a robust and legislative framework for the profession”, describing the timeframe they are required to perform those functions as “the slightly scarier part of the journey”.

“The time schedule feels very generous…it does feel like it’s a very long way away. It isn’t. It isn’t in the context of building education and building systems.”

Education clarification

The proposed guidance states that advisers with a bachelor’s degree in a related field (accounting, financial planning or advice, business, commerce, law or economics) will need to complete a bridging course of three units; the Corporation’s Act, the FASEA Code of Ethics, and behavioural finance to meet the standards. Advisers with a bachelor’s degree as well as a postgraduate qualification in a related field “will only need to complete a one-unit bridging course covering the FASEA Code of Ethics”, according to the release.

The proposal notes that advisers with unrelated degrees will need to complete a (AQF Level 8) graduate diploma, made up of eight units under the standards.

However, the release also points out that “FASEA would expect greater recognised prior learning (RPL) credits to be available for advisers with formal recognitions”, and “RPL may be available for advisers who have completed education programs and/or professional designations”.


Higher learning

Brian Knight, chief executive of education provider Kaplan, told Professional Planner that each unit should take 3 months to complete on a part-time basis.

“Each unit is generally 12 weeks, plus the assessment period,” Knight says. “We recommend approximately 10 hours per week, or 120 hours of study for each unit.”

At the ASIC forum Sanders noted that “the timing (of study) is not necessarily determined by us. What we are saying is that the minimum an adviser will have to do is a single unit of study, in the FASEA code of ethics, which is at AQF8 level and 120 hours. That can be done very quickly, or take a very long time, depending on the individual’s choice.”

“120 hours of study is typically one semester of study. Semesters can be fast or semesters can be short, depending on how enthusiastic you might be,” he continued. “And frankly, it’s a really interesting topic, the FASEA code of ethics, so if you’re not rushing out to do that I’d be surprised.”

The FASEA website notes that they are working with higher education providers to “develop an approval process for bridging course offerings, with the aim of having several options available for advisers by the commencement of the 2019 academic year”.

The standards authority has also sought to clarify the Australian Qualifications Framework (AQF) by including information in its release about where each qualification stands in the education hierarchy. Regarding diplomas and advanced diplomas, the release states that they are not an approved level of qualification, but that they “may provide credit and exemption – speak to your higher education provider.”

When asked if FASEA would be working with higher education providers to decide if completed learning (such as diplomas and designations) would be recognised as prior learning, Sanders indicated that FASEA would leave it to the appropriate bodies, but monitor developments closely.

“There is an existing regulatory framework that sits around higher education,” he said. “The Tertiary Education Quality and Standards Agency (TEQSA) has a responsibility here in terms of ensuring that universities and higher education providers are meeting certain requirements, including RPL. There are expectations in the TEQSA system that higher education providers give a maximum recognition of 50 per cent recognition of higher learning, but that can be factored in a whole range of ways relevant to the education provider.

“That might be based on years of experience, or courses that they’ve done, or professional designations, etc,” Sanders continued. “We don’t intend to step into that space immediately, but we are very mindful of the fact that it needs to be considered.”

Code of Ethics 

The standards authority also posted its first public draft of the FASEA Code of Ethics, which mandates that advisers act in a manner that is “demonstrably consistent” with principles relating to ethical behaviour, client care, quality process, and professional commitment.

Each principle has three standards that providers must adhere to. The four principles are also supplemented by a proposition that they “promote the values” of trust, competence, honesty, fairness and diligence.


Submissions on the relevance and application of the guidance can be made to FASEA directly via email at [email protected].

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning.
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