As part of the Standards Blueprint released on 16 November, the Financial Adviser Standards and Ethics Authority (FASEA) released further details on the exam requirement.
Speaking to SMSF Adviser, The Fold Legal director Jaime Lumsden Kelly said the guidance states that the exam will now be 3.5 hours and that advisers will be able to take legislative materials into the exam but not their own general notes.
The exam will cover three modules including the Corporations Act, particularly chapter 7 which covers financial services and markets; financial advice construction which looks at the suitability of advice, incorporating consumer behaviour and decision-making; and ethical and professional reasoning and communication.
Ms Lumsden Kelly said based on the guidance so far, it appears the exam will be the same for everyone, which is a concern for accountants given that they are only providing limited advice, which means the first two modules may be largely irrelevant for them.
“The Corporations Act and financial advice construction is very different for accountants compared to a financial adviser. An accountant doesn’t need to understand as many of the parts of chapter 7 as a financial adviser because they’re giving limited advice, and the financial advice construction is also quite different for accountants because they really only give full financial advice on SMSF structures if they’re under a limited advice authorisation,” Ms Lumsden Kelly explained.
“I’m not sure whether FASEA has given any thought to whether these modules actually have any relevance to what an accountant with a limited advice background actually does.”
Licensed accountants, she said, may have to spend hours studying content that will have little meaning or relevance to what they do just for the purpose of passing the exam.
“Obviously, accountants need to make sure that if they are advising on SMSFs, that it is suitable. But the difference is that an SMSF is a structure so it’s a little bit different to the way that you look at placing people in different products from different product providers and the considerations are a little bit different,” she said.
“[The new requirements] may end up being onerous to accountants who are only providing limited advice, just in the sense of how relevant the exam will be and the massive increase in CPD.”
While the content for the exam is not yet available, it is difficult to determine exactly what it will look like, she said, unless FASEA runs a second exam for limited advice providers, it will inevitably end up covering some content which is irrelevant to them.
“Now, there may not be any appetite from FASEA to run two separate exam processes, but ultimately, I think it’s a negative for accountants providing limited advice if they end up having to do study or exams on content that once they take it back to their practice, it won’t help them in any way,” she said.
So the exam will have no real technical or product content. It will only reinforce what we and our licensees should already know. Wait a minute, is FASEA preparing us for changes to align with individual licensing?? Conspiracy theories abound..
no wonder you you wanted anonymity….you are obviously very embittered ‘anonymous’…stop tarring all financial advisers with the same ignorant misinformed brush!!!
……only if you are an accountant who was duped into becoming licensed or authorized in the first place.
Accountants can continue to safely run an SMSF business without licensing within the current framework. Refer to ASIC Info 216, and the Financial Services Licensing Guides issued by the CAANZ & CPA’s. Accountants will find that there is nothing much that you do now and that you havent always done, that is outside the scope of these guides.
The “licensing lie” for accountants has been pushed by the financial services industry, and the commentators who have a vested interest in advising accountants on financial services positioning.
…as for the banal comments you read here sometimes, it is just disgruntled financial advisers who thought accountant licensing was going to dump a SMSF gravy train in their laps. It didn’t happen, and it wont now for sure!
Your arrogant self importance is just astounding. Self directed SMSF clients don’t want or need your help. Not, your one size fits all folksy advice, expensive “looking after” fees, or the rote investment advice you sing from a dealer group hymn sheet!
….p.s. now planners, feel free to regale us with stories of “what the accountant down the road did”. I’ve never seen one of you post a reply in here that would indicate even a modicum of intelligence.
Says an accountant who peddles SMSF’s to line their own pockets.
Spot on Kym, these guys sure have no respect for specialists. Hope they get to see an ophthalmologist soon or should it be a pediatrician?
John, where your analogy fails is that the ophthalmologist and paediatrician train to be a generalist FIRST, before deciding to specialise into a particular discipline. You don’t just train to be a brain surgeon from day one, without looking at all the other aspects and features.
Rubbish should have been done 20 years ago, this may have prevented accountants recommending a property purchase in Vanuatu via a Dr’s SMSF where the family had annual vacations!!!!
All those in the industry that provide “limited”, or more correctly, specialist advice, are being lumped into the one size fits all, FASEA new world.
If you are an investment only adviser, you aren’t carved out. If you are a risk only adviser, no carve-out has even been floated, let alone considered.
This was plain to see from the outset so, whether the lobbying was insufficient or, FASEA just chose to disregard, we are left with a one size fits all system.
[This seems similar to how SMSF got lumped into the Chapter 7 ‘financial product’ category.]
Same issue that your buddy John raises and same answer. You want special treatment for choosing to concentrate on one area only. Too bad, wont happen. I’m guessing you’re still pumping the old tune that an SMSF is a “tax structure”….hey? What makes an SMSF different to a retail, industry or corporate fund? If they are financial products, why isnt an SMSF? Is it only a tax structure because cottage industry accountants can do the work, whereas they’d never get anywhere near any of the other options?