- CA ANZ made submissions on both FASEA’s draft Code of Ethics and proposed education pathways.
- FASEA was urged to recognise the significant existing education, training and ethical standards of Chartered Accountants.
- The public interest will be best served by retaining accounting professionals in the financial advice industry.
No recognition for the CA program
In March 2018, FASEA released a draft Code of Ethics as well as updated guidance on the proposed education standards, clarifying that ‘related’ degrees would include those with major areas of study in accounting, economics, finance, tax, law and/or financial planning.
For accountants who provide financial advice, this proposal meant that they would be required to complete three bridging courses at university level. There was no recognition given for the postgraduate study, training and professional development that a CA must complete in order to become a member of Chartered Accountants Australia and New Zealand (CA ANZ).
This was significant as financial advisers with ‘related’ postgraduate qualifications would only be required to complete a single bridging course, being the FASEA Code of Ethics.
As set out in the Professional Standards of Financial Advisers Act 2017, all existing advisers will be required to pass an exam by December 31, 2020.
Extensive consultation with CA ANZ members
In preparing its submission, CA ANZ engaged with a range of stakeholders to understand their views and concerns in relation to the draft Code of Ethics and proposed education pathways.
Member consultation included financial advisory sharing knowledge sessions in Melbourne, Brisbane, Sydney, Hobart, Adelaide and Perth, financial advisory workshops, an online survey for members, and solicitation of member feedback through a range of CA ANZ’s e-mail communications.
Overwhelmingly, the feedback received from members was that whilst they were supportive of improvement in the financial advice industry for the benefit of the consumer, they were disappointed that their extensive education, ongoing professional development, and ethical standards were not recognised by FASEA in the proposed reforms. In addition to this, many members indicated that they would likely leave the financial advice industry if they were required to do further study.
CA ANZ proposed a new education pathway for members who are existing advisers
The key recommendation to FASEA was that they should accept that all CA ANZ members who are existing advisers have already met the education requirements as set out in the proposed guidance released in March 2018 and should therefore:
- Not be required to complete any bridging courses
- Only be required to pass the exam
This recommendation was based on FASEA recognising that CA ANZ members admitted post 1972 hold a ‘related’ degree and a ‘related’ postgraduate qualification (being the CA Program). Most industry practitioners believe that CAs have undertaken postgraduate study in order to become members and CA ANZ’s submission sets out in detail the factors in support of this.
Once recognised as holding a ‘related’ degree and ‘related’ postgraduate qualification, if CA ANZ members are required to undertake additional study, then this would be one bridging course only. If the bridging course is necessary at all, the recommendation was made that a composite bridging course would be more appropriate for CAs than the proposed FASEA Code of Ethics bridging course.
CA ANZ also highlighted to FASEA that there are segments of the accountancy profession who do not fit into the traditional financial planning model. This includes members practising in specialist SMSF advice, business valuations, mergers and acquisitions, and investment.
The recommendation was that FASEA should recognise the special circumstances of accountants who are not traditional, comprehensive financial advisers and that these members should not have to complete any further study beyond the proposed FASEA exam.
CA ANZ supports FASEA’s principles-based approach in the draft Code of Ethics
In the submission to FASEA on the draft Code of Ethics for Financial Advisers, CA ANZ highlighted that its members operate within a highly qualified and professional framework and are held accountable to the principles set out in professional standards. This includes Codes of Ethics established by globally recognised standard setting bodies in Australia and New Zealand.
As such, CA ANZ’s submission discouraged the introduction of any additional, new standards that would duplicate or conflict with our existing requirements and encouraged FASEA to streamline and harmonise the requirements of the new Code with existing laws, regulatory obligations and standards.
The Financial Adviser Examination
The Financial Adviser Examination became mandatory for all financial advisers with the passage of the Professional Standards of Financial Advisers Act 2017.
On July 11 2018, FASEA released a consultation paper on the Financial Adviser Examination and invited submissions on the guidance in relation to the exam. Submissions close on 31 July 2018.
CA ANZ will once again be representing the interests of members who provide financial advice.
The Financial Adviser exam
FASEA’s consultation paper on the proposed exam.Read more
Members are invited to provide feedback on professionalising the financial advice industry and improving consumer outcomes.Contact the Financial Services team