Advisers will have clarity on degree equivalence options within weeks, the head of the advice standards authority has confirmed, while calling on them to grasp the opportunity a professional financial advice community offers.
Speaking at the SMSF Association National Conference in Sydney, Financial Adviser Standards and Ethics Authority chief executive Deen Sanders said the consultation period on the proposed existing adviser qualification pathways will be open “in the next week or so” to give the industry a chance to have its say on the draft.
Sanders said he’s aware of anxiety among advisers driven by uncertainty, but stressed the end game of being recognised as a professional is important for client confidence and advisers’ reputations. He also reminded advisers FASEA’s function is statutory.
“We need to apply the law in a very specific way so we can deliver on community expectations,” he said. “The law is not just about your expectations, but about the Australian Government’s promise to Australian consumers.”
In response to concerns about the validity of the reforms, Sanders drew on the Australian Securities and Investments Commission’s recent Report 562, which showed 75 per cent of advice it surveyed was non-compliant with the law.
Sanders also drew on comments from this week’s first hearing at the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry to support the need for change.
“Financial advice may be an early focus of the commission, which has seen a number of submissions about the provision of inappropriate financial advice,” senior counsel assisting the commission Rowena Orr said.
Sanders said: “This is not yesterday’s problem; this is today’s problem.”
Since the proposed guidance was released in December, Sanders said, there have been a number of interpretations of the information on the FASEA website.
He stressed FASEA has not yet come to a conclusion about the value or time limit of qualifications, despite speculation that degrees older than 10 years would not be considered current under the new rules.
On the question of experience versus qualification, Sanders noted a long tenure in the industry or a designation did not equate to qualification.
“A designation in and of itself is not sufficient; the length of time an adviser has been in the industry is not, itself, a relevant consideration,” he said, referencing the explanatory memorandum in the Corporations Amendment (Professional Standards) Act.
“Fifty-seven years’ experience does not mean you are qualified; it means you are deeply wise and experienced, but it’s not the same thing as qualified. That doesn’t mean it should be discounted; it should be recognised and valued by you and by your colleagues and by the community…I want to be clear with you that our duty is pretty clear, it’s not to impose punishment, but it is to deliver an outcome here for the community.”
Sanders said FASEA does not have current data on how many advisers are qualified, but it is seeking clarification.