Licensed accountants to be hit by new education requirements, lawyer predicts
The new educational requirements for advisers could result in further tertiary education and increased CPD requirements for SMSF accountants under limited licences also, warns an industry lawyer.
In December last year, The Financial Adviser Standards and Ethics Authority released its proposed guidance on the mandatory education pathways for existing financial advisers.
Given there is no carve-out for accountants or limited licensees in the guidance from FASEA, The Fold Legal solicitor director Jaime Lumsden Kelly said it is expected that the new standards will also affect accountants under limited licences, as well as advisers.
“If we look at the base principles, essentially the education standards are going to apply to anyone who is an employee or an authorised representative of a licensee where they are also authorised to give personal advice to retail clients for all products except the handful that are exempt, [such as] insurance,” Ms Lumsden Kelly explained.
It remains unclear exactly what the education requirements will be, she said, with FASEA currently undertaking consultation with the industry.
“What we do know about the education standards is that a bachelor degree that is approved by the standards body which is FASEA, will meet the requirement. [However], at the moment, FASEA hasn't really approved any degrees,” she said.
FASEA has however referred to the Financial Planning Education Council (FPEC) Register and said that it intends to add to it, she said.
Ms Lumsden Kelly said she’s unsure that the types of degrees listed on the FPEC register will be particularly useful for accountants given that most of the degrees that are presently approved for the purposes of this requirement are degrees such as bachelor of commerce majoring in financial planning, bachelor of financial services, bachelor of business majoring in economics or finance or bachelor of business majoring in financial planning.
“A lot of degrees that accountants probably aren’t going to hold — there are some bachelor of accounting degrees on there, but not many,” she cautioned.
“Certainly some degrees offered by some of the major universities are not listed.”
Ms Lumsden Kelly said it is unclear at this stage at whether FASEA intends to add additional degrees that will benefit accountants.
FASEA is intending to have a process where they will accept some form of postgraduate qualification such as an eight subject postgraduate qualification, which covers certain financial planning areas, where an adviser doesn’t have a full degree that would qualify them, she noted.
“So, any accountants that don't currently hold a qualification that will qualify them, could look at doing that course, but of course two years is not that short either,” she said.
In addition to the bachelor's degree or the postgraduate qualification, licensed accountants, she said, may also have to pass an exam set by FASEA and may also have to comply with CPD requirements set by FASEA also.
"FASEA standards may be focused on financial planning [rather than] accounting, so there may be limited opportunity for them to do courses that will satisfy both CPD requirements at the same time, which of course is going to increase the amount of CPD that they need to do," she said.
Ms Lumsden Kelly encourages accountants concerned by the proposed education requirements to visit the FASEA website and make a submission during the consultation period to point out what they currently do as an accountant and what they think would be an appropriate standard for an accountant.