The Australian Securities and Investments Commission (Asic) has launched a consultation to update its rules covering financial services companies to raise the educational standards of those managing financial advisers.
It is proposing to introduce a new option for demonstrating the knowledge and skills of a responsible manager (Option 6) under the Regulatory Guide 105 Licensing: Organisational competence (RG 105).
Option 6 will reflect the higher education and training standards for financial advisers; and require advice licensees to have at least one responsible manager “who satisfies Option 6”.
Asic commissioner, Danielle Press, said: “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.
“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.”
Exam
Responsible managers who wish to “satisfy Option 6” would have to pass the financial adviser exam, “satisfy” the degree requirement that apply to existing financial advisers and meet the continuing professional development (CPD) requirements.
Also, 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.
Costs
Asic is looking for people to respond on the likely compliance costs, the likely effect on competition, and other impacts, costs and benefits surrounding the proposed changes.
Submissions for the consultation 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The proposals in the consultation paper are based on the existing draft guidance published by the Financial Adviser Standards and Ethics Authority (FASEA).
