Study for all planners compulsory under new proposed FASEA guidance

20th March 2018

In December 2017, the Financial Adviser Standards and Ethics Authority (FASEA) released proposed guidance on the new qualifications pathways for existing financial planners. FASEA has subsequently announced that it will consult on a further revised version of this guidance. Click here to read the revised guidance in full and here to make a submission. Submissions can be made until 5pm on June 29, 2018.

The new pathways

As covered by wealthdigital last December, FASEA’s previous guidance was nuanced with a number of as-yet-unclear elements. The new proposed pathways provide a greater degree of certainty to existing planners, however no planner will be without the need to undertake further study. For a flowchart of the new proposed pathways, click here.

Classifications of existing planners

The new proposed guidance splits existing planners into five categories:

  1. Those with no bachelor’s degree qualification or higher.
  2. Those with a bachelor’s degree or higher in an UNRELATED FIELD.
  3. Those with a bachelor’s degree in a RELATED FIELD.
  4. Those with a bachelor’s degree and a postgraduate qualification in a RELATED FIELD.
  5. Those with an approved qualification, based on the Financial Planning Education Council’s (FPEC) list.
Related fields

FASEA’s proposed guidance considers qualifications with the following areas of study as majors or specialisations to be in a RELATED FIELD:

  • Financial advice / financial planning (not on the FPEC list)
  • Financial services
  • Accounting
  • Finance
  • Tax
  • Law
  • Economics
Tip

December 2017’s guidance included qualifications with majors in business or commerce in the list of related-field degrees. Such fields have been removed from the new guidance.

The “10 year” rule

December’s guidance outlined the need for existing planners with financial planning degrees that are more than 10 years old to either undertake a new qualification or await further guidance on how FASEA will view their specific degree. The new guidance is less prescriptive on degrees older than 10 years, however, based on the FPEC’s guidelines, it can reasonably be assumed that degrees older than 10 years will not fall under category 5 above. Whether they will be viewed as degrees in a related field is uncertain – FASEA’s new guidance states that they reserve the right to provide further guidance on what constitutes a related qualification.

Tip

Study that is more than 10 years old is commonly not considered to be grounds for Recognition of Prior Learning (RPL – see section below). This rule is not absolute though, and each educational institution will apply their own rules.

1 – Planners with no degree

The pathway for existing planners with no degree has not changed from December’s guidance. Such planners will need to complete at least a graduate diploma in financial planning by 2024.

Education industry practices

There are many universities and tertiary education providers who already offer a graduate diploma in financial planning. For entrants who do not have an undergraduate qualification of at least a bachelor degree, the common pathway is to first enrol in, and complete, a four-subject graduate certificate in financial planning. These four subjects then commonly count towards a graduate diploma which can be obtained by completing a further four subjects (eight subjects in total).

The entry requirements for a graduate certificate depend on the provider’s policies. In some cases, industry experience may be enough, however frequently this needs to be accompanied by a relevant diploma or advanced diploma.

As such, the first step in many instances will be ensuring the necessary diploma or advanced diploma qualification is obtained in order to gain entry to a graduate certificate.

2 – Planners with an unrelated degree

The pathway for existing planners with an unrelated degree is the same as that for planners with no degree. They will need to complete at least a graduate diploma in financial planning by 2024. Planners with an unrelated degree should generally be able to gain direct entry into a graduate diploma of financial planning.

Note

FASEA’s guidance notes the main difference between planners with no degree and those with an unrelated degree will be the proportion of the qualification achieved through recognition of prior learning (RPL). RPL can provide the learner with exemptions from having to complete certain subjects or portions of subjects.

3 – Planners with a related degree

Existing planners with a bachelor’s degree (or higher) in a related field will be required to complete a three-subject bridging course by 2024. The bridging course will be expected to include subjects on FASEA’s new code of ethics, chapter 7 of the Corporations Act (which pertains to financial services and markets) and behavioural finance.

Note

No bridging courses have yet been approved by FASEA. FASEA’s proposed guidance does state that they will need to be at AQF 8 level (the same as a graduate diploma).

4 – Planners with a related bachelor’s degree and a related postgraduate qualification and 5 – Planners with an FPEC approved qualification

Categories 4 and 5 identified above have the same proposed pathway. Existing planners in these categories will be required to complete a one-subject bridging course on FASEA’s new code of ethics by 2024.

The role of Recognition of Prior Learning (RPL)

FASEA’s new proposed guidance allows the application of RPL for graduate diplomas of financial planning but not for the bridging courses. Generally, RPL cannot be applied to more than 50% of the course content. If an existing planner is granted RPL for 50% of a graduate diploma, this will typically leave the planner with 4 subjects to complete.

Designations

FASEA’s proposed guidance on how they will view designations is clearer than the guidance they issued in December. The proposed guidance unequivocally rejects the concept that any designation can be viewed as the equivalent of a necessary course. For the completion of a graduate diploma of financial planning, however, a designation may entitle the planner to some RPL.

In practice

Holding a designation may reduce the number of subjects a planner in category 1 or 2 needs to complete in order to achieve their graduate diploma in financial planning.

FASEA’s consultation

FASEA are asking for feedback on two different areas:

  1. The appropriateness of each of the proposed pathways.
  2. The likelihood that the increased education standards will improve advice generally.
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