Date posted: 24/08/2018 5 min read

Important ASIC update: Professional standards reforms for financial advisers

ASIC changes the timing of Financial Advisers Register notifications and clarifies recognition of advisers as ‘existing providers’

In brief

  • Financial advisers listed on the Financial Advisers Register by 1 January 2019 will be recognised as an ‘existing provider’ under FASEA’s new professional standards reforms
  • ‘Existing providers’ will benefit from transitional arrangements
  • ASIC has changed the timing of the earliest notification requirements under the reforms

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Important information for ‘existing providers’

All Australian Financial Services (AFS) licensees, including limited licensees, must appoint as financial advisers on the Financial Advisers Register, anyone who is authorised to provide personal advice to retail clients in relation to relevant financial products.

Financial advisers who are listed on the Financial Advisers Register by 1 January 2019 will be recognised as an ‘existing provider’ under the new, incoming professional standards being implemented by the Financial Adviser Standards and Ethics Authority (FASEA).

An ‘ existing provider’ is a person who is a ‘relevant provider’ at any time between 1 January 2016 and 1 January 2019, and is not banned, disqualified or suspended on 1 January 2019. A ‘relevant provider’ is a person who is authorised to provide personal advice to retail clients, as the licensee or on behalf of the licensee, in relation to relevant financial products.

‘Existing providers’ will benefit from transitional arrangements under the reforms.

An accountant providing financial advice as an ‘existing provider’ has until 1 January 2021 to pass FASEA’s exam, and may be required to complete bridging courses by 1 January 2024.  In the meantime, they can continue to work as a financial adviser.

Without recognition as an ‘existing provider’, an adviser (in addition to passing the exam) must complete a FASEA approved qualification by 1 January 2019 to continue to work as a financial adviser. They must also undertake a year of work and training. 

CA ANZ has advocated strongly on behalf of members for the minimisation of additional study and training requirements, and to date, the final requirements for accountants are undetermined. 

To ensure you are recognised as an ‘existing provider’ and benefit from the transitional arrangements, it is crucial that you are ‘current’ on the Financial Advisers Register at any time between 1 January 2016 and 1 January 2019. 

Changes to the timing of Financial Advisers Register notifications 

The Australian Securities and Investments Commission (ASIC) has announced it will delay the timing of the earliest notification requirements under the professional standards reforms, to better align with AFS licensees’ new reporting requirements, and enable it to implement the necessary changes to the Financial Advisers Register and associated IT systems.  

The most important change is that between 1 January 2019 and 14 November 2019, licensees do not need to notify ASIC they have authorised a ‘provisional relevant provider’. If licensees authorise a ‘provisional relevant provider’ during this period, they need to tell ASIC between 15 November and 31 December 2019. 

'Provisional relevant provider’ is the term used to refer to financial advisers who are completing their provisional year of work and training. 

The changes do not affect licensees’ or advisers’ obligations under the reforms – only the timing of notifications to ASIC. Advisers and licensees must still maintain compliance with record-keeping, ‘provisional relevant provider’, education, professionalism, and exam requirements.

Check the Financial Advisers Register

If you are not on the register, and need to be, notify your licensee immediately.

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Update the Financial Advisers Register

Information for AFS licensees on appointing advisers and authorised representatives to the Financial Advisers Register.

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ASIC’s media release

Professional standards reforms for financial advisers – ASIC update (1 August 2018)

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