In a submission to a Treasury discussion paper on the proposed cap, set to come into force on 1 July 2014, the Financial Planning Association (FPA) pointed to legislative changes that will force planners to comply with new training and education requirements that “are not traditionally described as self-education”.
The Australian Securities and Investments Commission (ASIC) recently released consultation paper CP212, which proposes to update Regulatory Guide 146 and raise the minimum entrance requirements for planners to an advanced diploma level from 2015 and then to degree level from 2019, said the submission.
The average cost of a diploma in financial planning is $1,800, according to the submission. An advanced diploma in financial planning costs $3,240 on average, and the equivalent of a degree will set planners back by $29,400.
FPA members also have minimum continuing professional development requirements, which the submission claimed costs planners $1,485 per annum. The Certified Financial Planner program costs students $3,310 per year (assuming they complete at least two units per year).
New FPA members have also been required to hold a degree from the middle of this year.
The submission also pointed to the Tax Agent Services Act regime, which will require additional training for planners in tax and commercial law from 1 July 2014.
“The imposition of a cap will penalise Australians who are endeavoring to improve their qualifications for work or business who are not incurring unnecessarily excessive costs,” the submission stated. “Many legitimate claimants would suffer higher out-of pocket education expenses as a result of this measure.”
Sole traders are at “particular risk of unfair treatment”, it added. “The FPA does not agree with the attempt in the discussion paper to treat employees and sole traders equally.”
