Qualification, exam and professional development

From 1 January 2019, new education and training standards apply to financial advisers as part of the professional standards for financial advisers.

The Financial Adviser Standards and Ethics Authority (FASEA) is implementing and overseeing these standards.

For an overview of the how the standards affect Australian financial services (AFS) licensees and financial advisers, see How the reforms affect you.

For dates for financial advisers and AFS licensees to comply with the standards, see Timeline for the reforms.

Qualification and training courses

The FASEA website has detailed information on the education requirements for existing and new financial advisers.

Existing financial adviser

Existing financial advisers must bring their qualifications up to an approved degree or equivalent level to meet the education requirements.

They must have an approved bachelor degree (AQF7 level) or above or equivalent. The maximum requirement is an approved graduate diploma (AQF8 level) comprising eight subjects.

Depending on their current qualifications, an existing financial adviser may only do bridging courses, such as a bridging course about the FASEA Code of Ethics (if it was not included in their qualification).

The FASEA Education Pathways online tool can assist financial advisers to understand what they need to do to meet the education standards.

The FASEA website also lists approved degrees and equivalent qualifications. This list includes current and historical approved degrees and courses, and is updated as additional courses are approved.

New financial adviser

For new financial advisers, the minimum education requirement is an approved bachelor’s degree (AQF7 level) comprising of 24 subjects, or above or equivalent.

Where a new financial adviser already holds an appropriate qualification, they can meet the education standard by attaining an approved graduate diploma (AQF8 level) comprising of eight subjects.

AFS licensees

AFS licensees must update the Financial Advisers Register when the financial advisers they have authorised complete the approved qualifications.

FASEA exam

Exisiting and new financial advisers must pass the FASEA exam to comply with the professional standards.

The exam tests the practical application of an adviser's knowledge in the three competency areas.

A person training to become a financial adviser must pass the exam:

  • after they have completed an approved degree, and
  • before starting the third quarter of their professional year.

Visit the FASEA website for detailed information on the FASEA exam, including how to prepare and register for the exam.

Professional year

From 1 January 2019, a person training to become a financial adviser must do a professional year before they are fully qualified. This is also known as the year of work and training.

The professional year is one year full-time, equivalent to 1600 hours. At least 100 of these hours must be structured training. The person works with a supervisor and their AFS licensee to establish a professional year plan.

A person can only start this professional year once they have completed an approved degree. They must pass the FASEA exam before starting the third quarter of their professional year.

When they have passed the exam and are authorised by an AFS licensee to provide personal advice on relevant financial products to retail clients, they can call themselves a provisional financial adviser.

AFS licensees must appoint a provisional financial adviser to the Register. They must also notify FASEA of a professional year arrangement within 30 business days of the start of the professional year.

Visit the FASEA website for detailed information on the professional year, including how to register.

Continuing professional development (CPD) requirements

From 1 January 2019, financial advisers must comply with the CPD requirements set by FASEA, rather than the CPD requirements in Regulatory Guide 146 Licensing: Training of financial product advisers (RG 146). The FASEA CPD requirements involve financial advisers completing 40 hours of CPD each year, of which 70% must be approved by their AFS licensee.

Annual CPD activities include development programs and activities to maintain and extend financial advisers' professional capabilities, knowledge and skills. This includes keeping up to date with all regulatory, technical and other developments relevant to professional financial advice.

A financial adviser (or their AFS licensee) must keep complete and accurate records of their CPD activity, and be able to provide a copy of these records to their AFS licensee on request.

The FASEA website has detailed information on the CPD requirements, including a CPD log book template.

AFS licensees must update the Financial Advisers Register if a financial adviser they have authorised fails to comply with the annual CPD requirements.

Where a CPD year includes the date ‘18 March 2020’

On 25 June 2020, FASEA announced that to assist financial advisers to meet their CPD requirements in the current COVID-19 impacted CPD year, FASEA has resolved to grant advisers an additional 3 months to meet the 40 hour CPD requirement. This 3-month extension is a one-off recognition of the difficulties faced by advisers this year. Advisers will still be required to complete 40 hours of CPD in 12 months in future CPD years and may not double count hours across these years. FASEA has made this modification via a legislative instrument. For more information, see FASEA’s media release: FASEA formalises three month CPD relief for advisers in recognition of COVID-19 business disruption.

The change will affect the obligation on AFS licensees to update the Financial Advisers Register if a financial adviser they have authorised fails to comply with the CPD requirements for the CPD year that includes the date 18 March 2020. In these circumstances, ASIC expects AFS licensees to lodge notices about CPD failures after the 3-month extension, if the adviser still has not met the CPD requirement at the end of the 3-month extension. The licensee should not lodge a notice immediately after the end of the licensee’s CPD year.

For example, an AFS licensee with a 2019-20 CPD year that ends on 30 April 2020 includes the date 18 March 2020. If an adviser still has not met the CPD requirements by the end of the 3-month extension, the licensee will need to report the adviser’s CPD non-compliance within 30 business days of 30 July 2020. The licensee does not need to lodge a notice until this time.

If an AFS licensee has already reported a financial adviser’s CPD non‑compliance on the Register, they can lodge a correction request to remove this from the Register.

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Last updated: 15/07/2020 05:24