Financial Planning | Understanding the Professional Year in Australia
Under the Corporations Act 2001, for any new entrants seeking to become qualified as a financial adviser, they must complete an ASIC Approved Degree, pass the ASIC Exam and complete a supervised Professional Year.
The ASIC Professional Year is a designed to train and develop prospective financial advisers in their technical ability, client care and practice skills, regulatory compliance and consumer protection, and professionalism and ethics. The Professional Year is aimed to ensure prospective financial advisers have the required knowledge and skills to provide personal financial advice to retail clients with respect to retail financial products.
It is a very simple process for a company to register a new entrant into the ASIC Professional Year.
Professional Year Broken Down
The Professional Year is broken into four quarters which equates to a minimum of 12 months full-time equivalent. This comprises of 1600 hours, of which at least 100 hours is required to be structured training. The quarterly framework provided by ASIC is 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.
Professional Year candidates will need to have completed their ASIC Approved Degree and passed the ASIC Exam before commencing quarter 3. At this point in time, they will be required to be authorised by the Licensee as a Provisional relevant provider.
The Professional Year candidate will be required to disclose to their client that they are a Provisional Financial Adviser and disclose the name of their supervisor.
Costs
There is no cost to enrol an employee into the Profession Year. The Licensee will likely charge an ongoing licensing fee for the provisional financial adviser in quarter 3 and quarter 4. This cost will vary depending on the Licensee.
The ASIC Exam costs $540 + G.S.T per sitting and it takes 3.5 hours to complete which includes 15 minutes reading time.
Useful tools
ASIC have provided a number of useful tools and templates to assist organisations with putting their employees through the professional year. Some of the templates include logbooks, certificates and explanatory notes on how to complete a logbook.
Conclusion
New entrants are looking to join organisations who understand the Financial Planning Professional Year, so it is important for organisations to have a detailed understanding of the steps involved. It is also important for organisations to acknowledge the Financial Planning Professional Year as one of the Factors Impacting Financial Adviser Salaries.
Contact RIVA Recruitment
RIVA Recruitment specialises in financial services recruitment across Australia. If you are seeking a new employee for your business or you are seeking an new employment opportunity, please feel free to contact us via LinkedIn, on 03 7003 7618, or email us at enquiries@rivarecruitment.com.au for further information.
