Advisers warned on ‘catch’ with CPD extension
Advisers planning to use the three-month extension for CPD announced by FASEA have been told that record keeping will be vital to avoid hours being double counted across two CPD years.
Last month, FASEA announced it would grant advisers an additional three months to meet the 40-hour CPD requirement in the current COVID-19-impacted CPD year, in recognition of the difficulties faced by advisers this year. FASEA stated it would consult on a legislative instrument amendment to give effect to this extension.
It also made it clear that advisers will still be required to complete 40 hours of CPD in 12 months in future CPD years and may not double count hours across the years.
BT head of financial literacy and advocacy Bryan Ashenden said that for many advisers, 30 June 2020 was the end of the first CPD year under the new FASEA CPD standards.
“If 30 June 2020 is the end of that first CPD year, it will actually have been an 18-month transitional CPD year with a minimum of 60 hours of qualifying CPD required,” said Mr Ashenden in a podcast by BT Technical Services.
“If required, FASEA will be granting you an additional three months within which to accrue relevant CPD for the current CPD year. So, continuing the example of a 30 June 2020 year-end for CPD purposes, if you are short of your required 60 hours, you will have until 30 September to obtain the shortfall.”
However, he warned the extension wasn’t “without a catch”, with the next CPD year, and 40-hour requirement, still starting 1 July 2020 —not 1 October 2020.
“Any CPD completed in that three-month extension that you need counted for the prior CPD period (i.e. the year ended 30 June 2020) cannot be double counted to the following CPD year. This means you will be in a position of needing to complete more than 40 hours of CPD in the year commencing 1 July 2020 if you need the relief,” he explained.
“While the extension is available for up to three months, it will cease if you complete any outstanding CPD requirements in less than that time.”
As a result, Mr Ashenden said advisers will need to carefully monitor CPD activity.
“As an example, if you have accrued enough CPD points in the area of professionalism and ethics, and CPD you complete in that area could count to the new CPD year (assuming completed on or after 1 July 2020), where as the next CPD activity after that could be in the area of client care and practice which, if you had a shortfall, could count to the prior CPD year,” he stated.
“Clearly, while the relief may be welcomed by some, record keeping will be key.”
He reminded advisers that licensees will be keeping a close eye on how the relief is used.
“They have a requirement to notify to ASIC if you fail to meet your CPD plan for a CPD year, meaning blanket reporting by the licensee across all their authorised representatives on a particular date will need to be replaced by individual adviser analysis,” he said.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.