The eight institutions that have funded FASEA’s operations since inception will be refunded any unused portions of the multi-million dollar handout when the arrangement ends on June 30 this year according to Stephen Glenfield, the education authority’s chief executive.
FASEA will then rely on funds allocated through Treasury to run its operations for its final 6 months with a staff of ten.
Speaking at a Senate Economics hearing on Wednesday night, Glenfield said that by the agreement’s end date, “the funds that haven’t been expended by FASEA would revert to those contributors in the proportion that they paid contributions”.
FASEA has been paid quarterly instalments of $975,000 for a three-year period. Its benefactors include the big four banks, as well as AMP, Macquarie Equities, Bendigo Financial Planning and Suncorp-Metway.
The authority is due to wind up its operations and transfer responsibilities to ASIC and Treasury on January 1, 2022 as per the exposure draft bill for the incoming Single Disciplinary Body.
FASEA’s FY20 annual report hints that the 6-month period would have been anticipated, however, leading to other arrangements in the form of Treasury funding.
“It is contemplated by the funding agreement that prior to the termination of the funding agreement, separate arrangements will be put in place for the financial services industry as a whole to provide ongoing funding to FASEA,” the report states.
The next phase
During the hearing, sitting financial services minister Jane Hume said FASEA had fulfilled its functions “very well”, but it was time to move onto the next phase.
Glenfield said the body was speaking with Treasury and ASIC “regularly” regarding the transfer of functions out of FASEA.
“We haven’t had any indication over whether FASEA staff will transfer,” he noted.
Asked whether he’s confident FASEA has given advisers a reasonable chance to complete the exam before its deadline on January 1, 2022, Glenfield said he believes so.
“We’ll have offered the exam 11 times today and 15 times by the end of the period,” the CEO explained. “Each time we offer the exam it runs over 5 days and you can sit morning or afternoon session or you can sit it online. If you look at that there’s been an extremely large number of exams offered throughout the transition period for people to sit.”
It feels like the numbers don’t support a hard shut-off of (effectively) 15 October when the registrations close for the last scheduled exam.
Whilst a time-limit to complete is sensible what has been a sticking point has been the 3-month suspension between a failed attempt and a re-sit. If you are unsuccessful in sitting 14, you can’t register for the last sitting so by and large all outstanding candidates should be sitting in the upcoming July exam period to give themselves the best chance of making it through. Not surprisingly, as that sitting comes hot on heals of the EOFY, many Advisers won’t be.
For my thinking the emphasis should be on the requirement to attempt by the last sitting and thereafter the opportunity to re-sit in additional sittings in the 1st quarter of 2022.
Appreciate that the legislation is not accommodative of this type of change but suggest that a change is considered.