Almost two years since then-finance minister Kelly O’Dwyer announced reforms aimed at lifting the “professional, educational and ethical standards” of advisers, the group charged with delivering them has released a final mandate, with a twist in the tail.

The most significant update is that for advisers with non-relevant degrees, shortcuts are now available if that degree involved “4 to 7 courses in one or more of the designated fields of study”, meaning financial planning, investment, accounting, tax, finance, business or commercial law.

Of the eight courses required to attain a graduate diploma – each requiring 120 hours of study – advisers who satisfy the criteria will receive credit for two courses.

Dante De Gori, chief executive of the Financial Planning Association, welcomed the change.

“In the original proposal, you needed to have the full eight related units to get any credit, and if you didn’t, you were treated as having none,” De Gori explained. “This allows for the fact that some people might have done four or more units that are relatable or relevant, but not equal to a relevant degree. It basically gives pro-rated credit for that study.”

De Gori said the change – which the FPA lobbied for in its submission ­­– was a fair acknowledgement of the education advisers have received that doesn’t fit the narrow band FASEA has prescribed for a relevant degree.

“It’s a pragmatic approach that we welcome, and it’s great that they recognise that people have done related study without having done a relevant degree,” De Gori said. “It’s a very positive change.”

Known knowns

As expected, much of what was released was merely confirmation of what had been stated in previous drafts of the reform pathways.

If you want to be a ‘relevant provider’ according to subsection 921B (2) of the Corporations Act, you need to have “completed a bachelor or higher degree, or equivalent education”. For an existing adviser, “equivalent education” will mean a graduate diploma of eight subjects, minus recognised prior learning (RPL).

If advisers have enough RPL behind them, they can get away with completing between one and three FASEA-approved bridging courses, but if that RPL amounts only to a relevant degree, the adviser will also need to complete a “FASEA-approved unit”.

The program has several other refinements as well, which FASEA chief executive Stephen Glenfield said came about due to the stakeholder consultation process.

Unsurprisingly, financial planning itself has been upgraded to a relevant (or related) subject, which means topics such as superannuation, retirement, insurance and estate planning can be included in the four to seven “relevant knowledge areas” within a non-relevant degree pathway that advisers can now take for extra credit.

Investments – including shares, derivatives, foreign exchange and options – has also been included as a relevant or related knowledge area.

Designations reshaped

While there is little material change around RPL for professional designations, FASEA has confirmed that holders of the advanced diploma of financial planning (ADFP) will receive two course credits.

The wording around RPL for professional designations – which is also set at two course credits – has also been nuanced. Designations such as the FPA’s Certified Financial Planner (CFP) and the Association of Financial Advisers’ (AFA) Fellow Chartered Financial Practitioner (FChFP) are referred to as “approved coursework to attain designation”, which De Gori said was FASEA’s way of leaving the door open for other associations to submit their own designations for approval.

“The reality is that it provides an opportunity for other designations to be approved,” De Gori noted. “There is a process where you submit your program and if it’s approved you then get eligible credits for that.”

De Gori confirms that the FPA will continue to lobby for the CFP to be worth more than two units worth of prior learning.

“That’s something that we obviously feel very strongly about,” De Gori said. “This is [FASEA’s] current position but they’re not stand-still documents, there’s always scope for them to be amended because they’ll have to be updated over time. From our perspective, we accept that members have to comply but we aren’t changing our position.”

Ten-year age limits on degrees and designations, which were mooted in earlier drafts, also appear to have been abandoned in FASEA’s final decree. De Gori warned, however, that advisers will still need to show when the qualification was completed.

“They’re not putting an arbitrary date on it,” he said. “There is no 10-year rule, you just need to prove when the course has run.”

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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