FASEA sets degree pathways for all advisers

30th January 2019

With the holidays just a sun-drenched memory, it’s time to get back behind the desk and grapple with all of December and January’s regulatory activity. wealthdigital has been on duty over the break and we’ll help you get back in the swing of things with a back-to-work series of Industry Insights articles. The next issue to cover is FASEA’s finalised education pathways guidance.

The finalised policy statement

On January 15, 2019, the Financial Adviser Standards and Ethics Authority (FASEA) issued its finalised policy statement on the degree qualifications pathways for both new and existing financial advisers. This policy statement is an update of the draft version released for consultation in November 2018.

The guidance provided by FASEA in this policy is slightly changed from that released in November. Changes include:

  • 2 course credits being provided where an existing adviser with an unrelated degree completed at least 4 of the relevant degree knowledge areas as part of their degree, and
  • Financial planning being included in the fields of study considered a related degree.

Existing advisers

An existing adviser is generally someone who has provided advice in 2016, 2017 or 2018 who is not disqualified. Existing advisers fall into 4 categories:

  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
Tip

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.

Existing advisers have until January 1, 2024 to complete their applicable qualification pathway. 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 are listed both on FASEA’s website, and in a legislative instrument. The final legislative instrument can be viewed here.

FASEA has released an entire draft policy statement 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).

Subjects to complete

The black icons below represent the number of outstanding subjects required to meet this education pathway.

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 policy statement considers any course at a bachelor’s degree level or higher of 8 subjects or more in any one or combination of the following fields as relevant:

  • Financial planning
  • Accounting
  • Finance
  • Banking
  • Investments
  • Economics
  • Law (including tax, finance, business, commercial and estate law)
Note

Relevant degrees in financial planning will generally be those obtained domestically that are not listed in FASEA’s legislative instrument as an approved degree. Foreign qualifications have a separate assessment process.

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/or approved designation coursework is 1 subject.

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.

Note

For the credits to apply, such designations must have been achieved by completing the coursework. This may preclude designations obtained under grandfathered rules that required less study.

Subjects to complete

The black icons below represent the number of outstanding subjects required to meet this education pathway.

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 where at least 4 units in relevant fields of study were completed as part of the unrelated degree,
  • 2 subjects for any completed advanced diploma or 8-subject diploma in financial planning, and
  • Up to 2 subjects for approved coursework completed in obtaining a professional designation.

Thus, the minimum required study for those with an unrelated degree in which 4 or more units in relevant fields of study were completed, an advanced diploma and approved designation coursework is 1 subject. Please note, the ethics, subject cannot be completed by course credits. The regulation and behavioural finance subjects can be if the substitute courses were approved by FASEA.

Eligible fields of study

For subjects completed as part of the unrelated degree to qualify for the 2 course credits, they must have been in one or more of the following fields of study:

  • Financial planning
  • Investments
  • Accounting
  • Tax
  • Finance
  • Law (including tax, finance, business, commercial and estate law)
  • Banking
  • Economics
Subjects to complete

The black icons below represent the number of outstanding subjects required to meet this education pathway.

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.

Subjects to complete

The black icons below represent the number of outstanding subjects required to meet this education pathway.

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. FASEA’s guidance no longer mentions this restriction. This is a significant shift and concession for many older tertiary qualified advisers

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”).

FASEA’s policy statement does not address how RPL granted before this policy was published will be viewed. Nor does it state how RPL can be granted as a result of study at a lower level. The only practical approach advisers can take is to assume that RPL will be granted, both retrospectively and in the future, in line with FASEA’s position. It is worth keeping in mind, however, that these discrepancies may be raised again in the future.

New advisers

Since January 1, 2019, a new adviser is required to have completed an approved bachelor’s degree, which is typically 24 subjects. A post-graduate pathway has been introduced which allows career-changers to complete an approved 8-subject graduate diploma or a 12-subject masters. A career-changer is someone who has:

  • tertiary qualifications in another field and/or
  • significant experience (a minimum of 3 years) in a related field.

Whether the new adviser is a career-changer is at the discretion of the education provider.

No time like the present

The imposition of a degree-qualification requirement for financial advisers, as well FASEA’s approach to enforcing this requirement, has cause much concern and conversation. While far from universally welcomed, FASEA’s policy is now clear and, for existing advisers who plan to continue practising into 2024 and beyond, rapid enrolment will allow the maximum time to complete their required pathways.

wealthdigital’s study hub provides subscribers with a range of tools to assist with their study, from tips on planning study timetables, to internal and external study resources. To enquire about subscribing to wealthdigital, click here.

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