The Federal Government has extended the deadlines for financial advisers to pass the Financial Adviser Standards and Ethics Authority's exam, as well as meet its qualification requirements.
Assistant Minister for Financial Services, Superannuation and Financial Technology Jane Hume announced new requirements for advisers registered on the Financial Adviser Register as of 1 January 2019.
These advisers have been given an additional year - by 1 January 2022 - to complete the FASEA-approved exam.
Advisers that have to meet FASEA's qualification requirements now have until 1 January 2026, which is an additional two years.
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These changes will not apply to new advisers registered after 1 January 2019.
Senator Hume said the extension of the qualification requirements will assist working parents, including those taking parental leave during the transition period, to have sufficient time to meet the requirements, maintaining a diverse adviser industry.
"Ultimately, strengthening the financial adviser sector will benefit all Australians, as they will be able to access better quality advice that is affordable and helps them make good financial decisions," Hume said.
The exam is currently only available in capital cities and will not be available in regional areas until September 2019.
In light of this, Senator Hume said the exam extension will ensure that all advisers, including rural and regional advisers, will have two years to sit the exam, as originally intended.
FASEA requires existing financial advisers to complete a FASEA-approved exam, hold a bachelor's degree or equivalent qualifications, undertake continuing professional development, comply with a code of ethics and be a member of an ASIC-approved code monitoring scheme.
"While making these changes to raise education standards in the industry, we also need to balance the impact of these reforms against maintaining the ongoing availability, quality and affordability of advice.
"Therefore, the Government intends to legislate to provide additional time for existing advisers to meet new qualification and examination requirements set by FASEA," she said.
It comes just days after Hume spoke at the Association of Financial Advisers' National Conference in Adelaide, but failed to announce the extension at the event.
Responding to the extension, the AFA described the announcement as "sensible".
"This an important development that reflects the government's recognition of the challenges in the FASEA process. We have worked closely with the Financial Planning Association (FPA) on this and we are pleased that this work and the engagement we have had with the government, along with the work our members have done visiting their local MPs, has been worthwhile. It is clear the government has listened," AFA chief executive Phil Kewin said.
"The FASEA process has taken a lot longer than expected. The new timeframe gives advisers the appropriate time to prepare for the exam and to deal with their other challenges."
The Financial Services Council and CPA Australia also welcomed the extensions.
FSC chief executive Sally Loane said the announcement shows leadership and commitment to ensuring the success of the new professional standards by recognising the implementation challenges faced by existing advisers.
"The Minister is demonstrating that she is listening to the advice industry and is acting to strengthen the foundations of the reform package. This is a sensible tweak to the reforms, and one that will alleviate pressure on the advice industry," Loane said.
CPA Australia public practice manager Keddie Waller commented: "The additional one year granted by the Government to complete the FASEA exam and the additional two years granted to meet the FASEA qualification requirements will help smooth the transition for financial advisers."
"We note, however, that there are elements, such as recognition of prior learning, that are still being finalised by FASEA.
"CPA Australia will continue to work closely with the Government and FASEA to help smooth the transition for our members, as there are further opportunities for improvement," she said.