This is Information Sheet 260 (INFO 260). It answers some frequently asked questions (FAQs) to help financial advisers who are existing providers understand:
the possible outcomes if they do not pass the exam within the required timeframe.
Editor’s note: This information sheet was updated on 4 April 2022 to reflect amendments made to the Corporations Act by the Better Advice Act and ASIC Instrument 2022/241. The amendments ensure that the dates by which ‘existing providers’ are required to meet the professional standards remain consistent with dates set before the commencement of the Better Advice Act on 1 January 2022.
1. What is the required timeframe for passing the exam?
If you are an ‘existing provider’ (see Question 2) who was on the financial advisers register (i.e. you were authorised to provide personal advice to retail clients on relevant financial products), generally you must have passed the exam by 1 January 2022 to continue to provide personal advice to retail clients.
From 1 October 2022, you must have passed the exam to continue to provide personal advice to retail clients.
2. Who is an 'existing provider' and who is a 'relevant provider'?
Two key terms under the professional standards reforms are 'existing provider' and 'relevant provider': see Table 1. These terms are defined in the Corporations Act 2001 (Corporations Act) and on our Definitions that apply to personal advice providers.
A person can be either an ‘existing provider’ or a ‘relevant provider’, or both.
Table 1: Who is an existing provider and who is a relevant provider?
Term
Definition
Reference
Existing provider
A person who:
was authorised to provide personal advice to retail clients on relevant financial products at any time between 1 January 2016 and 1 January 2019, and
on 1 January 2019 was not banned, disqualified or subject to a court enforceable undertaking.
Note: 'Relevant financial products' are financial products other than basic banking products, general insurance products or consumer credit insurance: see section 910A.
section 1546A
Relevant provider
An individual who:
is an AFS licensee or its representative, and
is authorised to provide personal advice to retail clients, as the licensee or on behalf of the licensee, on relevant financial products.
Note: Relevant providers must be listed on the Financial Advisers Register. Under section 922D, AFS licensees must notify ASIC when a person becomes a relevant provider, and under section 922Q, ASIC is required to add relevant providers to the Financial Advisers Register.
section 910A
3. I am an ‘existing provider’, what happened if I did not pass the exam by 1 January 2022?
Table 2 gives some example outcomes for ‘existing providers’ who did not pass the exam by 1 January 2022. See Applying the professional standards for more information.
Table 2 gives some example outcomes for existing providers of passing or not passing the exam by 1 January 2022.
Table 2: Outcomes related to completing the exam for existing providers
On 1 January 2022, were you also a relevant provider?
Did you pass the exam by 1 January 2022?
Outcome for you
Yes
Yes
You will continue to be recognised as a 'relevant provider' and can continue to provide personal advice to retail clients on relevant financial products.
Yes
No
If you did not sit the exam twice before 1 January 2022, you lost your relevant provider status on 1 January 2022. Before you can be authorised again to provide personal advice to retail clients on relevant financial products you will need to:
If you did sit the exam twice before 1 January 2022, you were able to provide personal advice to retail clients on relevant financial products until 30 September 2022.
However, if you did not pass the exam by 1 October 2022, you lost your relevant provider status on 1 October 2022: see Question 4.
No
Yes
You can be authorised by an AFS licensee to provide personal advice to retail clients on relevant financial products.
No
No
You need to pass the exam before you can be authorised to provide personal advice to retail clients on relevant financial products.
Example scenarios
Example 1: Taking a career break
Jane was authorised to provide personal advice to retail clients on relevant financial products between 1 May 2015 and 1 May 2021. Therefore, she is an existing provider.
Jane takes a 12-month break from the industry, starting on 1 May 2021, to spend time with her elderly mother interstate – that is, her AFS licensee revokes her authorisation to provide personal advice to retail clients and she is ceased on the Financial Advisers Register from 1 May 2021.
At 1 January 2022, Jane is an ‘existing provider’, but not a relevant provider. She does not need to have passed the exam by 1 January 2022. However, after Jane returns from her career break on 1 May 2022, she must pass the exam before she can be authorised as a relevant provider again.
Example 2: Moving into a different role within your organisation
Nadir is authorised to provide personal advice to retail clients on relevant financial products between 30 September 2014 and 23 January 2021. Therefore, he is an ‘existing provider’.
Nadir wishes to undertake a secondment to a compliance team in his organisation. When Nadir started in the compliance team on 27 January 2021, his AFS licensee revoked his authorisation to provide personal advice to retail clients, and he was ceased on the Financial Advisers Register for a 24-month period.
At 1 January 2022, Nadir is an ‘existing provider’, but not a relevant provider. He does not need to have passed the exam by 1 January 2022. However, Nadir must pass the exam before he can be authorised as a relevant provider again.
4. I am an ‘existing provider’ and I sat the exam at least twice before 1 January 2022. What will happen if I do not pass the exam by 1 October 2022?
‘Existing providers’ who sat the exam at least twice before 1 January 2022had until 1 October 2022 to pass the exam: see Question 1.
Table 3 gives some example outcomes for ‘existing providers’ who sat the exam at least twice before 1 January 2022, and therefore had until 1 October 2022 to pass the exam. See Applying the professional standards for more information.
Table 3: Outcomes related to ‘existing providers’ who sat the exam twice before 1 January 2022
On 1 October 2022, were you also a relevant provider?
Did you pass the exam by 1 October 2022?
Outcome for you
Yes
Yes
You will continue to be recognised as a 'relevant provider' and continue to be able to provide personal advice to retail clients on relevant financial products.
Yes
No
You lost your relevant provider status on 1 October 2022. Before you can be authorised again to provide personal advice to retail clients on relevant financial products you will need to:
You can be authorised by an AFS licensee to provide personal advice to retail clients on relevant financial products.
No
No
You need to pass the exam before you can be authorised to provide personal advice to retail clients on relevant financial products.
5. How do the education and training standards apply to a person training to become a relevant provider?
The professional standards require any person who wishes to be authorised as a relevant provider to meet specific education and training requirements, namely to:
hold a qualification approved by the Minister (degree standard)
pass the exam
participate in 40 hours of continuing professional development (CPD) each year
complete a full-time professional year that includes at least 100 hours of structured training.
The professional standards also require any person who wishes to be authorised as a relevant provider to comply with the Financial Planners and Advisers Code of Ethics 2019. The Code is a set of principles and core values in the areas of ethical behaviour, client care, quality process and professional commitment.
Transitional arrangements
Relevant providers who were authorised to provide personal advice to retail clients between 1 January 2016 and 1 January 2019 and met the definition of 'existing provider' (see Question 1) may be able to take advantage of transitional arrangements that apply to them when meeting the education and training standards: see Applying the professional standards.
For example, these transitional arrangements include not being required to complete the professional year, and having until 1 January 2026 to meet the qualifications standard.
However, as set out in Table 2 and Table 3, ‘existing providers’ who are relevant providers and did pass the exam by the exam cut-off date that applies to them (being either 1 January 2022 or 1 October 2022) lost their relevant provider status. These individuals will be required to complete the following education and training requirements before being authorised as a relevant provider to provide personal advice to retail clients:
pass the exam
complete the professional year, and
meet the qualifications standard.
Where can I get more information?
For an overview of how the professional standards apply to AFS licensees, existing providers, relevant providers and persons training to become a relevant provider see Professional standards.
For the relevant legislation, see:
Schedule 1 to the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021 (Better Advice Act)
Please note that this information sheet is a summary giving you basic information about a particular topic. It does not cover the whole of the relevant law regarding that topic, and it is not a substitute for professional advice. We encourage you to seek your own professional advice to find out how the applicable laws apply to you, as it is your responsibility to determine your obligations.
You should also note that because this information sheet avoids legal language wherever possible, it might include some generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases, your particular circumstances must be taken into account when determining how the law applies to you.
Information sheets provide concise guidance on a specific process or compliance issue or an overview of detailed guidance.
