SMSF advice set to lose senior execs under proposed education laws
Senior advisers in particular are considering exiting SMSF advice, as the federal government’s new mandatory education standards currently don’t wholly acknowledge their prior learning in the new guidelines.
Speaking at a roundtable event in Sydney, SMSF Association head of policy, Jordan George, said he has heard intense feedback from members who are opposed to the incoming education requirements set by the Financial Standards and Ethics Authority (FASEA).
“Every roundtable I've been to, that's been the feedback that they know someone who's said 'I'm not going to worry about undertaking this, I'm going to become a managing partner, and I'm going to get young guys and girls who have either got improved degrees coming through or they are happy to go and do a graduate diploma or 4 units and I will pay for them to do that, and I will still come for client meetings, still do client face to face but not going to sign off on the advice',” said Mr George.
SMSFA members present at the roundtable also expressed concern that existing advisers leaving the industry would lead to a dearth of experience on 1 January 2024, when the standards kick in, as educated but inexperienced advisers are left in the market.
According to FASEA, existing advisers with unrelated degrees will have to complete an approved graduate diploma by no later than 1 January 2024, while advisers with related degrees will have to take up three subjects as part of a bridging course by the same timeline.
Mr George said that while FASEA’s latest proposed guidance on education pathways provided more clarity than when it was first announced last year, more needed to be done to assure SMSF professionals that their years of experience and membership with a professional association was not for naught.
”Where people have done things like industry accreditation, other formal qualifications, CPD, experience in providing advice, those things will be quite important in determining how much extra they have to do,” said Mr George.
“One of the things we will be arguing to FASEA is that they need to put more details on the recognition of prior learning (RPL) and what's going to count and our concern is if this is left to the universities to determine the RPL, which is traditionally who does it, then there is a conflict because they will want you to do more courses to create revenue so we think FASEA should be looking at that to make sure there is no conflict and also so there is a standard that applies across the whole industry.”
This echoes the view of accounting bodies like Chartered Accountants Australia and New Zealand, which is currently in talks with FASEA to have prior learning further recognised.
“Generally speaking, accountants who have operated in this area have done it for a long time. Those people with 20-plus years' experience should be recognised as having different credentials to someone that has just got a degree and RG146,” said CA ANZ senior policy adviser, Bronny Speed, late last month.
“Surely those years and those extras equate to something,” she said.