October 2018

By Johanna Day – Director, Conduct IVP, Financial Services, Deloitte 

The FSC Policy discussion on FASEA was highly animated and unpacked some of the challenges, current uncertainty and implementation options for licensees. The panellists, Prof. Pamela Hanrahan (UNSW), Dr Deen Sanders OAM (Deloitte) and Louise Trevaskis (AMP) responded to questions from the FSC’s Ronald De La Cuadra ranging across:

• What has the introduction of FASEA meant for the advice industry?

• The consultation process so far

• What have the limited consultation times meant for the implementation of the Education Pathways and Code of Ethics?

• What will the introduction of Code Monitoring bodies mean for the advice industry?

• How has the Royal Commission impacted the advice landscape?

The audience questions ran hot and seemed in part to be symptomatic of FASEA’s lack of broad engagement and industry participants feeling in the dark about a number of elements of the imminent reforms – not least, the final form of the code and the curriculum of the degree courses and exam alike.

Some of the answers are clearly practical and Louise Trevaskis offered some tips for people to choose the right university and qualification program for them, as well as challenging education providers to make it clearer to current students what their choices for education – do and do not – open up for them in the future.

Overall, the uncertainty from industry participants in the room was the dominant theme and spanned the spectrum from tactical and immediate to strategic and over-arching.  Dr Sanders made the point that professionalisation is a momentous personal journey but also one which has disruptive effects on the industry as a whole. He encouraged a more coordinated focus on solutions that make sure we get to the right, optimistic outcome that addresses the original legislative concerns that drove the FASEA regime. The fact of being at an industry crossroads went to the core of Professor Hanrahan’s and Dr Sanders messaging and they cautioned that stakeholders would be missing a huge opportunity if the reforms were seen through the lenses of compliance and education, rather than as one for bold connection with the very purpose and outcomes expected of professional financial advice.

The challenge put forward by the panel was to design and plan for the future, including thinking about how the Corporations Act itself might be changed to provide better consumer outcomes, and accommodate new licensed and differentiated advice models.  Even though some things remain uncertain, there are many pointers in the marketplace that signal the future professional expectations and open up a debate about whether today’s licensee model will be the “right” model ahead.  It was suggested, for example, that to meet transparency and affordability needs, for some customers, there is likely to be a mix of advice channels and models in the future. 

Given the march of time, it is for industry leaders and representatives to think carefully and innovatively about the possible “futures” for Advice and, from there, work back to what might need to be legal and policy lobbying positions.  With the imminent dispensing of the FASEA-related statutory instrument and open invitation for contributions by Commissioner Hayne, the next few months represent a vitally important window in which to still influence the when and how of professionalisation.