On Friday evening last week, the Financial Adviser Standards and Ethics Authority (FASEA) released two legislative instruments.
The instruments provide further information about the requirements for those providing advice under the federal government’s new education standards. These instruments are not final, and are open for consultation until the end of the month.
The new education requirements fully come into effect in 2024. To qualify for transitional concessions, advisers need to have been on ASIC’s financial adviser register between 2016 and 2018, making December this year the final deadline.
The SMSF dilemma
The latest round of guidance still does not distinguish between an accountant holding a limited versus a full AFSL. In effect, under the new regulations, an accountant holding a limited AFSL will be completing training and education they won’t be using in practice.
For the SMSF Association, this is a paramount concern for members, and for the population of the SMSF adviser market.
“This has been a concern of the SMSF Association. Basically, the education load required under FASEA exceeds the type of advice an accountant can actually provide under a limited licence,” said the SMSF Association’s head of policy, Jordan George.
Already, about 60 per cent of Chartered Accountants have indicated they will leave the advice market if the new rules are brought into effect as they are.
CPD update
Key changes in Friday’s update include the ongoing annual CPD requirements have been reduced from 50 hours to 40 hours.
Ethics course requirements have also dropped from 10 hours to nine hours. However, this is still twice the number of hours that is required for most technical and regulatory subjects on an annual basis, which is “excessive,” according to Licensing for Accountants chief executive Kath Bowler.
Although the new framework is more lenient, the ongoing education requirements are still concerning for accountants.
Ms Bowler estimates that between holding a professional designation and meeting FASEA’s requirements, accountants providing advice will need to complete 60 hours of CPD annually. In some cases, this is more than what a doctor is required to complete.
“This does not recognise that accountants are not changing careers. They are adding to an existing accounting career. It’s not the 40 hours per se that is the issue, it’s the way it adds up with all the other roles,” Ms Bowler said.
Exam changes
By 2021, existing advisers will have to sit an exam to meet the new education requirements. The conditions of this exam have been slightly eased. It’s now 3.5 hours instead of four, and has allowances for open book for statutory materials.
The SMSF Association said the changes are an improvement, but still “arduous” for existing advisers.
“It’s as long as any university exam, and many who will be sitting it wouldn’t have sat an exam for a long time,” said Mr George.
More to come.
katarina.taurian@momentummedia.com.au
I’ll say it again – you cannot lump the accountant, financial planner and big banks in the same boat!
The BIG issue that has been overlooked by the Associations and many limited license accountants is the need to have completed a SMSF specialist training course along with FAR listing by 31 December or face being mentored for 1,600 hours before giving SMSF advice again. This is serious and is the real reason many accountants will quit in the next few weeks. They need to move, train and register quickly. Watch out for our 27 November webinar.
So, you already have to work the first 20 weeks of the year to pay your taxes, now you have to work another unpaid week to meet the bureaucrats’ needs. Unbelievable.