$200 million spent on FSR education

The financial services industry has been forced to shell out over $200 million to bring its workers up to speed with the educational qualifications required under Financial Services Reform (FSR), a new study has concluded.

The study, compiled by Dr Victoria Wise of the Victoria University on behalf of the Financial Services Education Agency Australia (FSEAA), found each Australian Financial Services Licence holder spent $30,000 on education in the three years leading up to the introduction of FSR.

Each licensee spent a further $18,000 in the year of implementation, resulting in a total education cost across the industry of over $201 million.

“The amount spent on education didn’t surprise us. What we had understood anecdotally is people were genuinely feeling the cost of education but it wasn’t as visible as the other forms of compliance expenditure such as legal fees,” said FSEAA general manager Deen Sanders.

The research also revealed a portion of this expenditure was spent with the narrow focus of meeting compliance deadlines rather than on schemes that concentrated on the impact of FSR on consumers. Sanders said there is evidence this practice is beginning to subside.

“We are seeing substantial evidence now that people are interested in having a more robust consideration of their education and people are asking their educational service providers ‘what else can you give me?’,” Sanders said.

Ongoing educational costs were estimated by the survey to be around $25,000 per annum for each licensee, to enable them to stay current with their requirements.