FASEA's degrees and prior learning recognition still in question
The Financial Adviser Standards and Ethics Authority (FASEA) will remain under pressure to better recognise a broader range of degrees, prior experience and continuing professional development (CPD) with both stockbrokers and risk advisers continuing to express concern at the current regime.
The position of stockbrokers and the reality that many were preparing to exit the industry was made clear to a hearing of the House of Representatives Standing Committee on Economics by the Stockbrokers and Financial Advisers Association (SFAA) which complained that the adviser exam and the FASEA educational requirements appeared solely aimed at people who wanted to be financial advisers.
Similar complaints have been made by risk advisers who have argued that they do not need to know about investment derivatives when their central focus is on providing advice around life/risk products and they should therefore be subject to a different set of benchmarks to conventional financial advisers.
NSW Liberal backbencher, Jason Falinksi questioned why FASEA was not appropriately recognising law and commerce degrees with SFAA chief executive, Judith Fox, explaining that recognition of the degrees was “minimal”.
“They're called related degrees. So you might get one credit; you might get two credits. Meanwhile, if you've done a financial planning degree, you'll get recognition of seven credits and you'll only have to do the ethics unit,” Fox said.
“We think it's perfectly acceptable that our members do an ethics unit, but the fact that they have to do seven units and study subjects like insurance, which stockbrokers don't get involved in, or superannuation, doesn't make sense when they've got degrees that are utterly related to their profession, which is investment.
“Unfortunately, we are seeing an exodus of experienced stockbrokers. While the additional time line to complete the exam and education requirements was welcomed, the reality is that many are going to quit the industry because they say: 'Why should I sit a degree in financial planning in order to be able to keep my job which is to be a stockbroker? I'm not trying to be a financial planner. That's not what I want to do’,” she said.
“So there is a considerable cohort of very experienced brokers—and they're the ones we want to give advice to our retail investors, particularly when there's a crisis, as there is now and has been over the last few months. Also, they're the ones we want to mentor the younger generation; although, we're not actually seeing many graduates come into our industry because there's no education pathway for them. Their degrees aren't recognised. They have to do a second degree and then for a year they can't really give advice. So, at both ends of the equation, our industry is being hammered,” Fox said.
She said that her organisation believed that the outcomes of what the FASEA regime is intended to achieve “are honourable; they're well intentioned, but the regulation and the way it's been constructed and applied is certainly having damaging consequences”.
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