FASEA refines policy on degree pathways

21st November 2018

On November 20, the Financial Adviser Standards and Ethics Authority (FASEA) issued two policy papers and a draft legislative instrument on the degree qualifications pathways for both new and existing financial advisers.

The guidance provided by FASEA in these documents has shifted somewhat from that provided in March of 2018. Some of the major changes include:

  • one course credit being awarded for a degree in an unrelated field,
  • clear course credit frameworks for those who have completed an advanced diploma, or 8-subject diploma, in financial planning,
  • a framework for course credits to be provided for professional designations awarded due to completed coursework,
  • a redefinition of what is a “relevant” degree,
  • a new list of already approved tertiary qualifications, and
  • a clear pathway for career changers based on a graduate diploma requirement.

Existing advisers

An existing adviser is generally someone who has provided advice in 2016, 2017 or 2018 who is not disqualified. Existing advisers still fall into the 4 categories outlined in March’s draft guidance from FASEA. These are:

  1. Those with an approved degree
  2. Those with a degree in a relevant field
  3. Those with a degree in an unrelated field
  4. Those with no degree

That said, the way the course credit framework interacts with these categories may mean that an existing adviser with no degree but an advanced diploma and a professional designation has the same amount of study to undertake as an existing adviser with a relevant degree and nothing else.

For a flowchart of the various pathways for existing advisers, click here.

Those with an approved degree

Existing advisers with an approved degree will need to complete a single subject on ethics and professionalism.

What is an approved degree?

All approved degrees will be identified both on FASEA’s website, and in a legislative instrument. The draft legislative instrument can be viewed here.

FASEA has released an entire policy paper on their course approval process. This paper includes approval processes for degrees, bridging courses and coursework required to obtain professional designations. At this time, only degrees have been approved by FASEA.

Note

FASEA’s education pathways policy makes it clear that vocational qualifications will not be approved. For a degree to be approved, it must be regulated by the Tertiary Education Quality and Standards Agency (TEQSA).

Those with a degree in a relevant field

Those with a degree in a relevant field will be eligible for 4 subjects’ worth of course credits, leaving only 4 subjects to be completed to achieve the necessary graduate diploma. Three of these subjects to be completed must be on ethics, financial advice regulation and behavioural finance respectively.

What is a relevant field?

FASEA’s previous definitions of a degree in a relevant field have varied with March’s definition including financial services, accounting, finance, tax, law and economics.

The guidance in the new education pathways policy now includes any course at a bachelor’s degree level or higher of 8 subjects or more in any one or combination of the following fields:

  • Accounting
  • Finance
  • Banking
  • Investments
  • Economics
  • Tax law
  • Finance law
  • Estate law
  • Business law
Course credit

In addition to the 4 subjects of course credit for the relevant degree, existing advisers may receive further credit of:

  • 3 subjects for any completed advanced diploma or 8-subject diploma in financial planning, or
  • Up to 3 subjects for approved coursework completed in obtaining a professional designation.

The ethics subject cannot be completed by course credit, thus the minimum required study for those with a relevant degree, an advanced diploma and approved designation coursework is 1 subject.

Note

wealthdigital contacted FASEA who confirmed that more credit is provided for an advanced diploma, 8-subject diploma or designation coursework when it is paired with a relevant degree than when it is not.

Approved coursework to achieve a designation

At the time of writing, no designation coursework has been approved by FASEA for this course credit. That said, in a press release issued on November 16, FASEA identified the FPA’s Certified Financial Planner designation achieved after 2007, and the AFA’s Fellow Chartered Financial Planner from 2014 as being examples of such coursework. In December 2018 FASEA proactively encouraged professional associations to seek approval for their designation coursework.

Those with a degree in an unrelated field

Existing advisers with a degree:

  1. at bachelor’s level or higher,
  2. of 8 subjects or more, and
  3. in an unrelated field

will be eligible for 1 subject’s worth of course credits. This leaves 7 subjects to be completed to achieve the required graduate diploma, three of which must be on ethics, financial advice regulation and behavioural finance respectively.

An unrelated degree is one in a field not listed as being relevant and not on FASEA’s approved degree legislative instrument.

Course credit

In addition to the 1 subject of course credit for the unrelated degree, existing advisers may receive further credit of:

  • 2 subjects for any completed advanced diploma or 8-subject diploma in financial planning, or
  • Up to 2 subjects for approved coursework completed in obtaining a professional designation.

Thus, the minimum required study for those with an unrelated degree, an advanced diploma and approved designation coursework is 3 subjects. Please note, the ethics, regulation and behavioural finance subjects cannot be completed by course credits from the advanced diploma or designation coursework.

Those with no degree

Existing advisers with no degree are required to complete an approved 8-subject graduate diploma in financial planning.

Course credit

Existing advisers may receive credit of:

  • 2 subjects for any completed advanced diploma or 8-subject diploma in financial planning, or
  • Up to 2 subjects for approved coursework completed in obtaining a professional designation.

Thus, the minimum required study for those with no degree, an advanced diploma and approved designation coursework is 4 subjects. Please note, the ethics, regulation and behavioural finance subjects cannot be completed by course credits from the advanced diploma or designation coursework.

Qualifications over 10 years old

In early FASEA draft guidance, qualifications older than 10 years old were not going to be considered for approval or as a relevant degree. This latest set of releases from FASEA no longer mentions this restriction. In fact, the draft legislative instrument outlining approved courses specifically includes some that are well over 10 years old.

Course credits and Recognition of Prior Learning (RPL)

The course credits awarded as outlined above will be issued by the education provider through the RPL process. FASEA’s policy statement on program and provider accreditation states that, in order to be approved, the provider will need to adhere to these course credit policies set out by FASEA.

It is worth noting that some providers may have previously given RPL of greater than 2 subjects for designation coursework. What’s more, the provision of course credits for an advanced diploma is unusual.

TEQSA’s guidance note on RPL raises concerns with the awarding of RPL at a level not appropriate to the course being completed. This seems at odds with the awarding of credit in a qualification at a graduate diploma level (known as “AQF level 8”) for study undertaken at advanced diploma level (known as “AQF level 6”).

New advisers

New advisers will be required to undertake an approved bachelor’s degree, which is typically 24 subjects. A post-graduate pathway has been introduced which will allow career-changers to complete an approved 8-subject graduate diploma or a 12-subject masters. No clarification is provided in the FASEA policy statement on how a “career changer” is defined.

Consultation

FASEA’s states that submissions on their draft legislative instrument will be accepted until December 14, 2018. This draft legislative instrument only lists approved courses. The two policies on education pathways and course approval are not explicitly stated as being open for consultation.

Click here to read more or make a submission.

38/23 Narabang Way
Belrose NSW 2085
T: 1300 000 499