ASIC Looking At Raising Standards for financial adviser managers


The Australian Securities and Investments Commission (ASIC), is looking to update its rules that cover financial services companies like, with the goal of raising the educational standards of the people managing financial advisers in the country.

It is currently proposing to introduce a new method with which managers of financial advisors can demonstrate their knowledge and skills, proving they have the qualifications for handling their work. This new option, Option 6, is being proposed under the Regulatory Guide 105 Licensing: Organisational Competence (RG 105).

ASIC says that Option 6 will be reflective of the higher education and training standards that are in place for financial advisers like, and will require advice licensees to have, at minimum, one responsible manager who satisfies Option 6.

ASIC Commissioner Danielle Press says that these proposals are designed to improve the organisational competence of financial advice licensees by ensuring that that the people who supervise advisers are responsible managers who adhere to the appropriate level of educational and training acumen.

Commissioner Press adds that they would like to add to the currently existing options for managers to demonstrate their knowledge and skills; their qualifications, via the new Option 6. This new option will be reflective of the industry’s new expectations when it comes to the level of competence of its people.

Responsible managers who wish to be cleared by Option 6 would have to pass the financial adviser exam, possess the degrees require for financial advisers, as well as meet continuing professional development (CPD) requirements.

Both new and existing managers who wish to meet Option 6’s terms have until the start of January 2021 to pass the exam, and until the start of January 2024 to acquire the required degrees.

ASIC is currently looking for people to respond on the compliance costs, which they are expecting to take effect on competition, as well as other impacts, costs, and, of course, benefits regarding the proposed changes.

Submissions for consultation can be submitted until December 6, 2018, with an updated RG105 outlining the update organisational competence requirements for advice licensees expected to come out sometime early 2019.

The proposals under consideration are based on the existing draft guidance, as published by the Financial Adviser Standards and Ethics Authority (FASEA).