Understanding the Financial Planning Professional Year
As of the 1st of January 2019, any new entrants wishing to undertake a career as a financial adviser in Australia are required to meet several criteria to be eligible for a career in financial advice. These criteria include:
- Completing an ASIC Approved Degree
- Passing the ASIC Financial Adviser Exam
- Completing a supervised Professional Year.
The ASIC Professional Year is a structured process that allows aspiring financial advisers to develop their technical, client related, and practical skills in preparation for providing advice.
What does the professional year entail?
The Professional Year consists of 4 quarters, undertaken over a minimum of 12-months on a full-time basis. This equates to 1,600 hours, 100 of the hours are dedicated to a structured training curriculum. The structure of each quarter is outlined by ASIC as follows:
- Quarter 1: Client Observations and support to Supervisor/Experienced Adviser
- Quarter 2: Supervised Client Engagement and Advice Preparation
- Quarter 3 and 4: Indirect Supervision of Client Engagement and Advice Preparation.
Provisional Relevant Provider (New Financial Adviser) Status
After the entrant has completed the following requirements, they are considered a ‘provisional relevant provider’:
- Completed an approved degree or equivalent qualification
- Completed quarter one and quarter two of the professional year
- Passed the financial adviser exam
- Have been authorised by their Australian Financial Services Licensee (AFS Licensee) as a provisional relevant provider on the Financial Advisers Register.
A ‘provisional relevant provider’ is equivalent to a ‘provisional financial adviser/planner’.
Note: The ASIC Financial Adviser Exam must be completed before commencing the third quarter of their Professional Year.
Professional Year Training Structure
The structured training of the Professional Year is comprised of three sections, made up of a series of formal and informal training and development sectors:
- Education for the purposes of achieving a professional designation
- Education for the purposes of accreditation in specific forms of financial products relevant to licensing arrangements
- Education for the purposes of meeting more detailed requirements in specific financial advice provision (e.g. SMSF, stockbroking, aged care).
AFS Licensees can approve the ‘acceleration’ of an entrant in either quarter one or two of their professional year. The licensee can do so if they believe the entrant:
- Has achieved the outcomes set out in the professional year plan for that quarter; and
- Is capable of satisfactorily completing the work activities and structured training for the next quarter.
If an entrant is successful in their acceleration pathway for quarter 1 or 2 and meets all other requirements and licensee approval, they may be eligible to sit the Financial Adviser exam earlier – meaning they may progress to the title of provisional relevant provider earlier.
Quarter three and four of the professional year are not eligible for acceleration under any circumstances. If the entrant takes the acceleration pathway in quarter one or two, 1,600 hours of training over the 12-month full-time period is still a requirement of completing the professional year.
Fees
Each time an entrant sits the financial adviser exam, it is a $1,500 fee which is paid upon booking the exam. It costs approximately $55 to add a new adviser to the Financial Adviser Registry. For an Australian Financial Services License (AFSL) to license an authorised financial adviser, the fees vary depending on the AFSL’s offering.
Conclusion
New entrants need to be aware of the requirements to become an authorised financial adviser. Most organisations expect new entrants to work in a financial planning support role for at least 2-3 years, before progressing through a professional year.
To understand the current salary ranges for new financial planning entrants, and experienced financial advisers, read our recently published Financial Advice Salary Guide.
Contact Us
If you are seeking a new employee for your business or you are seeking a new employment opportunity, please feel free to contact RIVA Recruitment on 0434 943 647, or email us at enquiries@rivarecruitment.com.au for further information.
