Will the minister sensibly change the FASEA regime?
A question mark is hanging over the Treasury on whether it will improve the Financial Adviser Standards and Ethics Authority (FASEA) regime or simply continue with its existing settings.
The Minister for Superannuation, Financial Services and the Digital Economy, Senator Jane Hume will have effective discretionary control over the FASEA regime as of 1 January, 2022, but the question is being asked about how she will use it.
At stake is not only the future of Standards 3 and 6 of the FASEA code of ethics but also whether the list of accepted degrees will be extended to accommodate those in stockbroking and whether some accommodation will be made with respect to specialist life/risk advisers.
In the absence of different approach, Stockbrokers and Financial Advisers Association (SAFAA) chief executive, Judith Fox is concerned about the future of the stockbroking in circumstances where the FASEA regime is acting as a significant barrier to new entrants.
Speaking to Financial Newswire, Fox said that the FASEA regime had resulted in a virtual drought of new entrants to the industry with the sector looking unattractive to graduates leaving university with commerce and finance degrees not recognised under the current FASEA regime.
At the same time, Association of Financial Advisers (AFA) general manager, Policy and Professionalism, Phil Anderson said that the situation was not just an issue for stockbrokers but also one for life/risk advisers.
He suggested that it was in these circumstances that 1 January, 2022, represented a pivotal date for the future of the FASEA regime given the discretion which would be delivered to the minister.
Fox said that as things currently stood, the narrowness of the degrees recognised under the FASEA regime was acting as a significant negative for graduates with highly relevant commerce, business and financial degrees.
“They are leaving university with good degrees and have no interest in then being required to obtain a degree narrowly targeted at financial planning,” she said.
Fox said that it was arguable that the narrowness of the degrees recognised under the FASEA regime represented an inappropriate departure from the original legislation which spoke of the desirability of a degree or degree equivalent.
Anderson said that with the Treasury taking responsibility for the educational standards component of the FASEA regime from 1 January, it was possible that changes might happen.
In an oblique reference to the Federal Opposition’s promise to waive the necessity for advisers with more than 10 years’ experience to obtain a bachelor’s degree, Anderson said that if both sides of Parliament were in agreement there was no impediment to sensible change.