Question

Q4 : Fact Finding of requirements on Financial advisory service registration in Australia
Assuming after graduation you would like to work as a financial adviser. Go to the website of Australian Securities and Investment Commission, do a fact finding and present an analysis of financial advisor registration to identify whether you are qualified and what steps should be taken to be a financial adviser in Australia. The following questions should be addressed:
(1) What is the ASIC’s Financial advisers register?
(2) Who should be on the Register, who are not on the Register and who updates the register?
(3) What information should be on the Register?
(4) What are the relevant financial products for a financial advisor?
(5) What are the professional standards applied for a financial advisor.

Answer 1

(1) The Financial Advisers Register is published on the MoneySmart website and is managed by ASIC.

The Register is a public record of financial advisers who provide personal advice on complex financial products to consumers. It allows consumers to:

• check that a financial adviser is authorised to provide financial advice
• find information about an adviser before getting financial advice from them.

The Register also improves:

• the ability to assess the qualifications, experience and employment history of financial advisers
• ASIC's ability to identify and monitor financial advisers in Australia.

(2) Who is on the Register

The Financial Advisers Register lists all individuals who are authorised as a financial adviser.

The definition of a financial adviser is an individual who is:

• an Australian financial services (AFS) licensee, an authorised representative, employee or director of an AFS licensee, or an employee or director of a related body corporate of an AFS licensee, and
• is authorised to provide personal advice to retail clients in relation to relevant financial products to retail clients (consumers).

'Relevant financial products' do not include:

• basic banking products
• general insurance products
• consumer credit insurance
• a combination of any of those products.

A financial adviser who has their own AFS licence is listed on:

• the Financial Advisers Register, and
• the AFS Licensees Register.

A financial adviser who is also an authorised representative is listed on:

• the Financial Advisers Register, and
• the Authorised Representatives Register.

Who is not on the Register

Advisers who do not meet the 'financial adviser' definition above are not on the Register. For example, a person who provides:

• general advice
• personal advice on products that are not relevant financial products, such as general insurance, consumer credit insurance or basic banking products.

If this person is an authorised representative for an AFS licensee, then they are listed on the Authorised Representatives Register.

If an AFS licence is held by a company, the company is not listed on the Register. Only individual financial advisers with their own AFS licence or authorised as a financial adviser under an AFS licence are listed.

Who updates the Register

While ASIC manages the Financial Advisers Register, it is the AFS licensees' responsibility to add and update information on the Register. It is a breach of their obligations not to do so and penalties may apply.

AFS licensees can authorise other persons to update the Register on their behalf.

(3) Information on the Register

The Financial Advisers Register provides information about financial advisers, including:

• name
• work history
• qualifications and training
• financial products they can advise on.

(4) Relevant financial products

When an AFS licensee appoints a financial adviser to the Register, they must authorise them to provide advice on at least one of the products on the list of 'relevant financial products'.

Clients must be ‘retail only’ or ‘retail and wholesale’.

The relevant financial products that a financial adviser can provide advice on must not exceed those of the AFS licensee, or the organisation that the AFS licensee has authorised to provide advice, for example, a body corporate.

Relevant financial products are all financial products except:

• basic banking products (basic deposit products and a facility for making non-cash payments)
• general insurance products
• consumer credit insurance, or
• a combination of any of these products.

Deposit and payment products	Non-basic deposit products Non-cash payment facilities
Derivatives If you select ‘All’, you cannot select one or more of the other derivatives.	All Wool only Electricity only (leave blank if not applicable) Grain only
Foreign exchange contracts	Foreign exchange products
Government debentures, stocks or bonds	Government debentures, stocks or bonds
Life insurance products If you select 'Life risk insurance', you cannot also select 'Consumer credit insurance only'.	Investment life insurance products Life risk insurance products Consumer credit insurance only
Managed investment schemes Any of the managed investment scheme options can be selected, with the exception of the following combinations: 'Managed investment schemes, excluding IDPS' and 'Managed investment schemes, including IDPS' 'Managed investment schemes, excluding IDPS' and 'IDPS Only'.	Managed investment schemes excluding investor directed portfolio services (IDPS) Managed investment schemes including investor directed portfolio services (IDPS) IDPS only Own managed investment scheme only (leave blank if not applicable) Horse racing syndicate Time-sharing scheme Managed discretionary account (MDA) services
Retirement savings account products	Retirement savings account products
Securities	Securities
Superannuation If you select ‘All’, you cannot select one or more of the other superannuation authorisations.	All Self-managed superannuation fund A person's existing holding in a superannuation product
Margin lending facilities	Standard margin lending facility (leave blank if not applicable) Non-standard margin lending facility (leave blank if not applicable)
Carbon credits	Australian carbon credit unit Eligible international emissions unit
Miscellaneous financial facilities	Miscellaneous financial investment products — MDA services Miscellaneous financial risk products Miscellaneous financial investment products

(5) Professional standards for financial advisers

The professional standards require financial advisers to:

• have an approved qualification
• pass the FASEA to test the practical application of their knowledge in key competency areas
• participate in 40 hours of continuing professional development (CPD) per year to maintain and extend their professional capabilities, knowledge and skills, and
• comply with the Financial Planners and Advisers Code of Ethics – a set of principles and core values in the areas of ethical behaviour, client care, quality process and professional commitment.

Anyone wanting to become a financial adviser must also complete a full-time professional year that includes at least 100 hours of structured training.