The legislated professional standards in the Corporations Act require financial planners to:
Anyone wanting to become a financial planner must also complete a full-time professional year that includes at least 1,500 hours of work activities and 100 hours of structured training.
A single disciplinary body has been established within ASIC to oversee financial planners adherence to legislated professional standards and the law.
Financial Planner & Financial Adviser Code of Ethics (Previously FASEA Code)
The Financial Planner and Financial Adviser Code of Ethics 2019 (the Legislated Code of Ethics) commenced on 1 January 2020. It sets values and standards which financial planners must adhere to. It contains a set of twelve principles and core values in the areas of ethical behaviour, client care, quality process and professional commitment.
Prior to the winding up of FASEA on 31 December 2021, this was commonly referred to as ‘the FASEA Code’. Further information and guidance are available to members on the FPA’s Legislated Code of Ethics Information Hub.
Previous guides and guidance documents and other FASEA content can be found at Trove.
Exam
ASIC took over the administration of the financial adviser exam on 1 January 2022. Previously the exam was administered by FASEA.
New financial advisers must pass the financial adviser exam prior to becoming authorised to provide advice, in addition to meeting all other professional standard requirements.
For those existing relevant providers that passed the exam prior to 31 December 2021, you can remain authorised to provide personal advice and all other aspects of the professional standards requirements must be met.
Information on the exam cut-off dates for existing advisers who did not pass the exam prior to 1 January 2022 can be found in ASIC’s Information Sheet 260 – FAQs : Timeframe for passing the financial adviser exam.
Exam preparations:
Exam Standard and Administration:
- The Minister has registered Legislative Instruments that set principles and standards for ASIC’s administration of the Exam, which commenced on 1 January 2022.
- ASIC has released further information on its administration of the exam, including the 2022 Exam Schedule and booking information.
Legislated Continuing Professional Development (CPD)
Financial planners are required to complete 40 hours of CPD each year in order to maintain and extend their professional capabilities, knowledge and skills.
A minimum number of hours is required across the following mandatory categories:
- Technical – five hours
- Client Care and Practice – five hours
- Regulatory Compliance and Consumer Protection – five hours and
- Professionalism and Ethics – nine hours
Qualified tax relevant providers
From 1 January 2023, Qualified tax relevant providers must also ensure their minimum 40 hours of CPD each year includes five hours in the category of tax (financial) advice.
Record keeping
A financial adviser (or their licensee) must:
- keep complete and accurate records of their CPD activity
- be able to provide a copy of these records to their AFS licensee on request.
Provisional relevant providers
Provisional relevant providers are not required to complete CPD as part of their professional year requirements.
CPD Tools and Resources
Access FAAA’s suit of CPD tools and resources, including My CPD – a one-stop shop to plan, access and track CPD with ease.
Further information can be found in the Corporations (Relevant Providers Continuing Professional Development Standard) Determination 2018.
Legislated Professional Year (PY)
The Professional Year (PY) standard commenced on 1 January 2019, and must be completed by all new financial planners to be qualified to provide personal financial advice to retail clients on retail financial products.
The PY comprises of one year full-time equivalent comprising of 1600 hours, of which at least 100 hours is to be structured training. The PY can be commenced whilst in the final stages of an approved degree.
A quarterly framework details key activities to be undertaken and competencies to be acquired and demonstrated. This approach enables an individual to transition from a directly supervised approach to an indirect supervision approach as follows:
- Quarter 1 – Client observations and support to supervisor/ experienced planner
- Quarter 2 – Supervised client engagement and advice preparation, and
- Quarter 3 and 4 – Indirect supervision of client engagement and advice preparation.
A PY plan must be implemented, which is aimed at developing the following competencies:
- Technical competence
- Client care and practice
- Regulatory compliance and consumer protection, and
- Professionalism and ethics.
Before commencing the third quarter of the PY, the individual must:
- have completed an approved degree or equivalent qualification
- have passed the financial adviser exam, and
- be authorised by their licensee as a ‘provisional relevant provider‘ on the Financial Advisers Register.
PY Tools and resources
The FPA has a suite of PY tools and resources available to assist Provisional Financial Planners.
Legislated Qualification Standards
The Education standard requires financial planners to have an approved bachelor’s degree (AQF7 level) or above or equivalent. The maximum requirement is an approved graduate diploma (AQF8 level) comprising eight subjects.
Financial planners who are ‘existing providers’ have until 1 January 2026 to meet the education standards.
Depending on their completed qualifications, an existing financial planner may be eligible for recognition of prior learning (RPL) and only be required do bridging, or ‘gap’ courses to meet the new Education Standard.
Visit Treasury’s Financial Adviser Standards website to access the education standards for existing advisers, new entrants and qualified tax relevant providers, as well as the list of approved courses and the foreign qualifications assessment process.
FASEA wind up & handover
The Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021 wound up FASEA on 31 December 2021, with its functions transferred to the Minister responsible for administering the Corporations Act and to ASIC.
- The responsible Minister will set professional standards for financial planners including the Code of Ethics, education, CPD, exam, and professional year requirements, and approve degrees, courses and foreign qualifications
- Treasury will assist the Minister
- ASIC will administer the exam.
- Standards developed by FASEA will remain in place unless the Minister approves amendments after 1 January 2022.
