Lack of consultation an “important shortfall” with FASEA

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The Financial Adviser Standards and Ethics Authority (FASEA) is expected to move to legislation with little, if any, further consultation.

Peter Hogan, SMSF Association Head of Education and Technical, told the Technical Day in Brisbane that an “important shortfall” with FASEA was the lack of consultation.

He said there had been a number of opportunities to “talk” but little true consultation.

According to Hogan, FASEA plans to move straight from the current phase to drafting legislation to be put to Parliament, with an aim of it being in place for 1 January 2019, “with no real opportunity to comment on the legislation, which we don’t believe is appropriate given the massive ramifications that it is going to have … for everyone in the industry”.

The SMSF Association has been “heavily involved” in the FASEA consultation process from “day one”, Hogan said. This included submissions to “anyone who will listen” – including FASEA and the Government – around the “inadequacies that we feel are there in the current proposals”.

There are “clearly some deficiencies” in the code of conduct, with probably biggest one being that it will be the sixth code of conduct for a lot of professionals, Hogan told the conference.

“There are more codes of conduct than you can poke a stick at, and this will be another.”

Hogan said the education framework was “fairly difficult”, and that an SMSF specialisation is “sorely missing” in the bridging regime.

He said that FASEA wasn’t acknowledging how people choose to become financial advisers – saying that people don’t wake up “in year ten” of school deciding to be a financial planner. Instead they come through some other qualification, be it an accounting, business or commerce degree.

However FASEA is proposing that anyone not licensed at 1 January 2019 will need to complete an undergraduate degree in order to move into the industry.

While there will be recognition of prior learning, the SMSF Association feels it is more appropriate to have a graduate bridging program.

Hogan reiterated a call for an SMSF specialisation to be included, pointing to the recent ASIC report, the draft Productivity Commission report and the ongoing Royal Commission.

“Whenever they’ve come across poor self managed superannuation fund advice it because the people providing that advice are not specialists in that area.”

Hogan said the SMSF Association was making the case for a SMSF specialisation in all their submissions.

The 2018 SMSF Association Technical Day for Perth is being held on August 23.

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