We are very quickly moving towards the commencement of the financial advisor professional standards reforms. ASIC has now confirmed changes to the reporting dates for various required notifications. The schedule has been amended with the intention of simplifying Australian Financial Services Licensees’ (AFS Licensees) disclosure obligations, as well as explaining the process for identifying advisers as existing providers.

What do the recent changes mean for existing providers?

Any financial adviser who is:

  • listed on the Financial Advisers Register (FAR) between 1 January 2016 and 1 January 2019; and
  • is not banned, disqualified or subject to an enforceable undertaking as at 1 January 2019;

will be recognised as an existing provider.

AFS Licensees should ensure all advisers are appropriately registered on the FAR as a current adviser as soon as possible.

What do the recent changes mean for new providers?

In instances where an AFS Licensee wishes to appoint an adviser not listed on FAR between 1 January 2016 and 1 January 2019, the adviser will be required to complete the following:

  1. successfully sit an exam;
  2. complete an approved qualification; and
  3. undertake a year of work and training.

Conversely, if you are an existing provider, you will have until 1 January 2021 to successfully sit the exam as well as up until 1 January 2024 to complete an approved qualification.

ASIC Notifications – Summary of changes

The key change is that ASIC will delay the timing for AFS Licensees to notify of new advisers appointed after 1 January 2019. As a result, new advisers can only be added to the FAR from 15 November 2019. This means that Licensees are unable to add new advisers to the FAR prior to 15 November 2019 as it is a transition period.

Please refer below to the list of changes:

Information AFS Licensees need to give ASICOriginal timeline
(when ASIC needs to be notified)
New timeline
(when ASIC needs to be notified)
New timeline
(when the information will be shown on the FAR)
Details about provisional relevant providers who are authorised between 1 January 2019 and 14 November 2019From 1 January 201915 November 2019 – 31 December 2019*From 15 November 2019
Licensee’s CPD year start date (and any changes to that date)15 November 2018 – 31 December 201815 November 2019 – 31 December 2019*Not displayed
Details of any failure(s) to meet the CPD requirementsFrom 1 January 2019From 15 November 2019*From 15 November 2019
Date that an existing provider has passed the examBefore 1 January 202115 November 2019 – before 1 January 2021Not displayed
Relevant provider's principal place of business and compliance scheme covering the relevant providerBy 1 January 2020In the first notice lodged between 15 November 2019 – 31 December 2019*From 15 November 2019
*AFS licensees have an ongoing obligation after this date to keep information up to date about existing relevant providers and to provide information about any new relevant providers (including provisional relevant providers) they authorise.

What are the key dates?

RequirementStart date for new providers
(authorised on or after 1 January 2019)
Start date for existing providers
(authorised between 1 January 2016 and 1 January 2019)
Hold a relevant bachelor or higher degree or equivalent qualification1 January 20191 January 2024
Pass the exam1 January 20191 January 2021
Complete a year of professional work1 January 2019Not applicable
Comply with CPD requirements1 January 2019
(not applicable in the year of professional work)
1 January 2019
Comply with the code of ethics1 January 20201 January 2020
Be covered by a compliance scheme1 January 20201 January 2020
Appoint on the FAR15 November 2019 onwardsBetween 1 January 2016 and 1 January 2019

Background

The Corporations Amendment (Professional Standards of Financial Advisers) Act 2017 introduced new requirements for advisers who provide advice to retail clients on complex financial products. Commencing 1 January 2019, all new financial advisers must meet the new professional standards and training obligations as a prerequisite to providing personal advice to retail clients. For more information on this, please see our blog; New Professional Standards and Training Obligations for Financial Advisers are Coming Soon.

Also, further commentary from ASIC can be found in Media Release 18-355, which discusses the urgency of registration. 

Sophie Grace has skilled Compliance Consultants and Lawyers ready to assist you with these new changes.

Should you require assistance or any further information, please contact us.

Julie Pourtarvirdi

Julie works with the Compliance and Legal Team with a focus on compliance and legal services. Julie assists with document preparation for participants in the financial services industry and with conducting legal research. Julie assists the compliance team in implementing ongoing compliance support, updating procedural documentation and assisting clients with the preparation of AFSL and ACL applications. Julie also assists in the preparation of legal documentation and legal research. Prior to joining Sophie Grace, Julie worked as an In-House Legal Counsel for a property development company, where she assisted with agreements and contracts, as well as assisting in banking and financial services. Julie has a Bachelor of Arts (Commercial Law) and a Bachelor of Law from Macquarie University. She is admitted as a solicitor in NSW.