Joel Ronchi

A person training to provide financial advice must complete a professional year before they are fully qualified.

To the uninitiated, the process can be a complex landscape involving 1,600 hours of structured quarter-by-quarter training under the watchful eye of a supervisor.

Fourth Line chief operating officer Joel Ronchi told a virtual room full of finance professionals during a lunchtime webinar on Tuesday that with some careful planning, the process can be less cumbersome.

Ronchi, who has more than 25 years’ experience in the finance sector as a practitioner, consultant, executive officer and educator, explained that the professional year legislation was introduced from 1 January 2019.

The three parties involved in a professional year include the supervisor, the licensee and the new entrant, who needs to be in the final stages, or have completed an approved qualification to commence.

Ronchi explained that the candidate has an obligation to maintain a logbook and complete structured training with the supervisor.

“This is a full-time gig for a year split in four distinct quarters, but it’s part of a broader picture that’s part of a career pathway, which can be conducted on a part-time basis,” Ronchi said.

The candidate needs to shadow the supervisor and work across a range of clients throughout the professional year.

“The training must be measurable, assessed and preferably leads to further qualification outcomes,” Ronchi said. “There’s no need to reinvent the wheel here. The best place to start is to look at what you’ve got within your network, such as logbooks or final certificate templates.”

The task of the supervisor (who needs to be active on the ASIC Financial Accountability Register) is significant. The need to dictate the resources to be used throughout the period, the meeting schedule, software, resources to be used and how often will meet.

Ronchi said the supervisor is taking on significant responsibility because they must be willing to sign off on the new adviser being competent once the process is completed.

“Firstly, they need to guide the professional year candidate through the program, reviewing and validating their work throughout the year,” Ronchi said. “The supervisor also has to retain records of the assessment and approve the competence of the new entrant and that the new entrant is legally compliant.”

Clients must be notified in writing the new entrant is undertaking their professional year.

An audit of at least five client files showcasing what the new entrant has worked on is also required to ensure that they are ready to go off and give advice alone out in the real world.