Facing up to FASEA

Facing up to FASEA: How prepared are you?

The tougher professional and education requirements being set by the Financial Advisers Standards and Ethics Authority (FASEA) aren’t designed to make your life harder (although that may be an unintended consequence). They aim to raise standards in financial advice and align the sector with other bona fide professions such as accounting, law and medicine. 

FASEA is also likely to accelerate the industry’s journey to professionalism and give the sector a much-needed credibility boost.

According to Financial Planning Association (FPA), approximately 2.7 million people received financial advice last year but a further three million Australians who needed it didn’t seek it. 

A key reason behind their inertia was a lack of trust. 

Higher standards will go a long way to building trust and credibility.

FASEA’s five prongs

There are five key components to FASEA’s mandatory requirements: 

Compulsory education requirements for all advisers

Supervision requirements for newcomers

Code of ethics course  

Compulsory exam for all advisers

Ongoing professional development

Some of the finer details are still being finalised and FASEA is working with higher education providers to develop an approval process for bridging courses, however, there’s enough information available for advisers to ascertain how their current qualifications fit into the FASEA regime and determine if they need to undertake additional study.

There is no hiding the truth. The majority of advisers will need to go back to school. Data consultancy Skilful Analytics claims up to 70 per cent of advisers need further education.  

Click here for a list of existing approved higher education providers that will be adopted by FASEA for authorisation.

Fortunately, there is plenty of time to prepare. 

The requirement on advisers to sit a mandatory exam doesn’t come in until 1 January 2021 and the deadline for being fully compliant is 1 January 2024.

Adviser who hold a relevant degree and post-graduate qualification are in an ideal position because they only need to complete one study unit on the FASEA Code of Ethics to comply. 

Advisers with a degree in a related field will need to undertake three study units: Corporations Act 2001, FASEA Code of Ethics and Behavioural Finance. 

Advisers without a related degree will need to do more work.

Click here for the FASEA pathways infographic. 

Why bother?

Many advisers, particularly those nearing retirement age, will be weighing up the pros and cons of doing further study.

There is no question additional study requires time, effort and cost but advisers who need and want to do extra study shouldn’t despair because the content will be familiar and not brand new.

Those who enjoy learning may even find it interesting and valuable. 

While FASEA doesn’t give special consideration or ‘credit’ for experience, seasoned advisers with considerable knowledge and expertise can use it to their advantage. Their knowledge will equip them with great insight into the content being taught and enable them to see how it can be applied in day-to-day practice.  

No matter your age, there are many personal benefits to be gained from going back to study including a greater sense of self-worth, professional mastery and overall well-being.  

Ultimately, the FASEA standards will provide consumers and clients with the comfort of knowing that all advisers are suitably qualified. 

This level playing field will provide greater comfort to advisers also. 

There is currently no way for consumers or advisers to know who is and isn’t properly qualified because training and qualifications are so disparate. FASEA’s uniform standards reassure the community that advisers are both experienced and properly qualified. More Australians are expected to seek and retain professional advice as a result.

Proactive steps for advisers

  • Do your research and know where you stand in relation to the new requirements.  Check out the Pathways infographic to determine the route that applies to you.  
  • If you do need to undertake further study, start investigating the courses available and ensure they are on the Financial Planning Education Council’s approved list.  Around half of the universities in Australia offer approved degrees so there is plenty of choice.  
  • Consider how much study is involved overall and what you can realistically undertake each semester given your lifestyle and circumstances.  
  • Going back to study can be daunting and may require a period of adjustment.  A good study routine is critical.  Most universities recognise the need for social, emotional and practical study support – especially for mature aged students - and offer a wide range of options so take advantage of what’s on offer.  
  • Regularly check the FASEA website for updates. Taking accountability for what’s required will help you feel more in control.