Aggregated News From Investment Management Regulators

Important information for financial advisers yet to pass the exam and their licensees

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  • Financial advisers who have sat the exam at least twice before 1 January 2022 will be eligible for the extension and have until 1 October 2022 to pass the exam.
  • Financial advisers who do not pass the exam before 1 January 2022 (including those who have applied for a re-mark of the November 2021 exam), and are not eligible for the extension, will need to have their authorisation to provide personal advice to retail clients on relevant financial products revoked and be ceased on the Financial Advisers Register (FAR) on or before 31 December 2021 if they want to retain their existing provider status.
  • For more information relating to financial advisers visit the Financial Advice Hub.

Following the introduction of the Better Advice Act, ASIC will take over the administration of the financial adviser exam from the Financial Adviser Standards and Ethics Authority (FASEA) starting 1 January 2022. During this transition, there are important obligations and deadlines financial advisers must consider going into 2022.

Extension for financial advisers to pass the exam by 1 October 2022

Financial advisers who practised before 1 January 2019, known as existing providers, who are currently authorised to provide personal advice to retail clients on relevant financial products are generally required to pass the exam before 1 January 2022.

However, the Government has announced that financial advisers who have sat the exam at least twice before 1 January 2022 are eligible for an extension. These advisers will have until 1 October 2022 to pass the exam.

If a financial adviser enrolled for an exam before 1 January 2022, but did not subsequently sit the exam, this will not count. Enrolment alone will not count towards the requirement to ‘sit the exam at least twice.’

Status of financial advisers who have not passed the exam by 1 January 2022

Financial advisers who do not qualify for the extension must have passed the exam before 1 January 2022 if they wish to continue to provide personal advice.

If a financial adviser is not eligible for the extension and has not passed the exam before 1 January 2022, their Australian financial services (AFS) licensee is required to have revoked their authorisation to provide personal advice to retail clients on relevant financial products on or before 31 December 2021 in order for the adviser to retain their status as an existing provider.

Financial advisers who lose their status as an existing provider will be treated as a new financial adviser. This applies to financial advisers who have applied for a re-mark of the November 2021 exam.

Note: A ‘relevant provider’ is an individual who is authorised to provide personal advice to retail clients in relation to relevant financial products either as the holder of an AFS licence or on behalf of the licensee. In this article, the term ‘financial adviser’ is used instead of ‘relevant provider.’ Financial advisers who were a relevant provider at any point between 1 January 2016 and 1 January 2019 are ‘existing providers’. For more information about the definitions of ‘relevant provider’ and ‘existing provider’ please see INFO 260.

New financial advisers must meet additional education requirements, including completing the professional year before being able to provide personal advice to retail clients on relevant financial products. For more information, see Information Sheet 260 FAQs: Timeframes for passing the financial adviser exam (INFO 260).

When a financial adviser’s details change (for example: ceasing their authorisation) the AFS licensee must update the Financial Advisers Register (FAR) within 30 business days.

AFS licensees must ensure that advisers whose authorisation have ceased do not continue providing personal advice to retail clients in relation to relevant financial products on or after 1 January 2022.

Financial advisers who are awaiting the results of a re-mark

Financial advisers who have applied for a re-mark of the November 2021 exam will not receive their result until sometime in January 2022.

This means that financial advisers who have failed the November 2021 exam and are waiting for the results of a re-mark, and are also not eligible for the extension to 1 October 2022, will lose their status as a relevant provider on 1 January 2022. They will also lose their status as an existing provider (and be treated as a new financial adviser) unless their AFS licensee takes steps to ensure they are no longer a financial adviser on or before 31 December 2021.

If a financial adviser is ceased as a financial adviser on or before 31 December 2021, meaning they retain their status as an existing provider, and they pass on a re-mark of the November 2021 exam, they can immediately be authorised again to provide personal advice to retail clients on relevant financial products.

However, if a financial adviser is ceased as a financial adviser on or before 31 December 2021 and their re-mark confirms a fail of the November 2021 exam, they will still retain their status as an existing provider. They will need to pass the exam before they can again become authorised to provide personal advice to retail clients on relevant financial products.

Financial advisers who are awaiting the results of a re-mark should discuss the business impacts of being ceased as a financial adviser on or before 31 December 2021 with their AFS licensee.

This news item was originally published by the Australian Securities and Investments Commission (ASIC AU). For more information, please see the Source Link.

Regulator Information

Abbreviation: ASIC
Jurisdiction: Australia

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