It’s been a week since we got our first look at FASEA’s proposed new framework for Financial Advisers Continuing Professional Development (CPD), and boy did it get the industry talking!
We found the document interesting for a variety of reasons: for what it proposes; for the changes to the current CPD regime; and for what it doesn’t discuss.
Keep in mind this is a consultation paper, it’s not yet set in stone and we expect FASEA will give additional guidance and explanation later this year.
So, what are the key updates from the consultation paper?
The biggest change for individuals is that Financial Advisers will need to complete 50 hours of CPD per year, of which 30 hrs must be approved and tracked by their AFSL (aka, no longer approved by their association). And the remaining 20 hours must be tracked.
While a fair few people in the industry are saying that this number seems high, quite a few Financial Advisers are already doing 50 hours a year - between 30 hours for their AFSL or Association and 20 hours for their TASA accreditation.
The industry is still waiting to find out where TASA CPD fits within the new CPD framework, but we hope FASEA will allow it to be included.
There is good news in the consultation paper for Advisers, and that is that they can do 7.5 hours a year of Professional or Technical Reading (15%) and on top of that any adviser who has to do additional education under the FASEA framework, can count up to 25 hours a year (a whopping 50%) from these studies towards their CPD for that year.
The other big change for individual Financial Advisers is in their record keeping requirements.
They'll need to keep “an up-to-date and accurate record of their CPD activities for 6 years from the end of each CPD year.”
This record keeping must also be completed by AFSL (which is currently a legislated AFSL requirement outlined by ASIC). So it really is about just completing your CPD, and keeping a record of it!
FASEA also notes in its consultation paper that they are looking for Advisers and AFSLs to utilise digital solutions for tracking CPD activities (say hello to Caddie!)
For the AFSL’s, the biggest change will be the implementation of a published and regularly review CPD policy for their Financial Advisers to follow.
This document will set out the AFSL’s approach to CPD, their process for approving CPD, how training plans are developed, evidence required to prove that CPD was completed, as well as the AFSL’s auditing and record keeping policies.
The other major change for AFSL's is the need to approve 70% of their Advisers' CPD each year.
How this will be implemented is still to be confirmed.
This is a big change from the current CPD regime where it is the Associations that provide accreditation for CPD material.
One of biggest changes for the industry is the definition of new CPD categories. Previously, the RG146 had broken CPD down per product areas, e.g. Securities, Derivatives, Superannuation etc, however the new proposed categories are much more detailed.
These are as follows;
In addition to new categories, they’re tracked by hours as opposed to a point scoring system (that most associations carry out now).
So, what CPD goes into each of these new categories?
From the descriptions given in the consultation paper we are expecting to see the following;
While FASEA’s consultation paper has provide quite a bit of guidance for the new CPD framework there are still questions, especially around Monitoring Bodies.
In ASIC CP300 it states that Monitoring Bodies will need to provide education to Advisers who breach the Code of Ethics, we will have to wait and see where this education fits.
This document isn’t something Advisers should fear, most Advisers are doing CPD day in and out, they just don’t have the system to easily track it.
That’s where Caddie comes in.
Caddie rewards Financial Advisers for the professional development they are doing day in and out, by tracking and recording against their CPD activity online – while giving Dealer Groups and AFSL’s the oversight tools needed to manage, track and report on their progress.
Since launching in January 2018, we’ve helped hundreds of Advisers and Dealer Groups get on top of their CPD, and our innovative platform already aligns with FASEA’s proposed CPD changes (just update your CPD settings from 30 hours to 50!).
See what our customers have said about the platform, and get in touch for an obligation-free demo here.
Who’s your Caddie ;)