ASIC has released a consultation paper on proposed updates to its organisational competence requirements for advice licensees.
The updates are for Regulatory Guide 105 Licensing: Organisational competence (RG 105) to support the professional standards reforms, which aim to lift the education, training and ethical standards in the financial advice industry.
The proposals in Consultation Paper 305 ‘Organisational competence requirements for advice licensees: Update to RG 105’ (CP 305) are based on the existing draft guidance published by the Financial Adviser Standards and Ethics Authority (FASEA).
“Our proposals are designed to strengthen the organisational competence of financial advice licensees by ensuring that advisers are supervised by at least one responsible manager who satisfies the new education and training standards,” ASIC commissioner Danielle Press said.
“We would like to add to the existing options for responsible managers to demonstrate their knowledge and skills by introducing a new Option 6. This option will reflect the higher levels of competence expected in the industry.”
ASIC is proposing that advice licensees would be required to have at least one responsible manager who satisfies Option 6; responsible managers who wish to satisfy Option 6 would have to pass the financial adviser exam, satisfy the degree requirement that applies to existing financial advisers, and meet the CPD requirements; and both new and existing responsible managers who wish to satisfy Option 6 would have until 1 January 2021 to pass the exam and until 1 January 2024 to satisfy the degree requirement.
Submissions for CP 305 are due by 6 December 2018, with an updated RG 105 setting out the new organisational competence requirements for advice licensees expected to be released in early 2019.
The host of new education requirements, set by the Financial Adviser Standards and Ethics Authority (FASEA), will be imposed on existing and new accountants and advisers who provide financial advice by 2024.
There has been considerable backlash from the accounting industry, with the professional bodies urging FASEA to rethink its education requirements, as well as lobbying to reinstate the accountants’ exemption.