“Confidence comes from discipline and training.” — Robert Kiyosaki
New entrants and the professional year
New entrants are required to work with their supervisor and Australian Financial Services (AFS) licensee to establish a professional year plan. The Corporations (Work and Training Professional Year Standard) Determination 2018 sets out the extensive range of requirements that apply to the professional year, including the requirements for supervisors and AFS licensees.
While the Financial Adviser Standards and Ethics Authority (FASEA) was wound up on 1 January 2022, the standards it introduced continue in force unless amended or replaced by the Minister. These standards are now set through legislation and administered by ASIC.
This article is based on the Corporations (Work and Training Professional Year Standard) Determination 2018, which remains the governing instrument for the professional year. For further context, see Treasury’s financial adviser standards framework.
When a professional year may be required again
The professional year is generally completed once at the start of an adviser’s career. However, there are circumstances where an existing or previously authorised adviser may be required to complete a professional year again.
This can arise where an adviser:
- ceases to be authorised for a period of time and later seeks to return to providing personal advice
- does not meet ongoing education, exam or training standards within required timeframes
- is unable to demonstrate that they have maintained the required competencies
In these situations, the licensee must assess whether the individual can be re-authorised as a relevant provider or whether they must re-enter the profession as a provisional relevant provider and complete a professional year.
ASIC has emphasised that licensees are responsible for ensuring advisers meet the education and training standards before authorisation. Where this cannot be demonstrated, a professional year may be required as part of re-entry.
Further guidance is available from ASIC.
Who can supervise?
A supervisor must have at least 2 years of work experience as a relevant provider (excluding the Professional Year), relevant competence and licensee responsibility for supervision. The individual being supervised can have more than one supervisor in their Professional Year, whether successive or joint (eg different supervisors for different advice specialisations).
The Corps Act 2001 – SECT 921F provides further clarification as follows;
A supervisor of a provisional relevant provider is an individual who:
a) has supervisory responsibility for the provisional relevant provider; and
b) is a relevant provider; and
c) is not a provisional relevant provider; and
d) is not a limited-service time-sharing adviser.
The Role of the Supervisor
Supervisors must provide supervision that actively assists the New Entrant in getting the full benefit of the Professional Year.
A client who deals with an individual during their Professional Year must be informed (in writing) of this status and of the supervisor’s name and contact details.
The supervisor must approve, in writing, the statement of advice provided to the client and is taken to have provided the advice.
Any personal advice provided (whether orally or in writing) by a provisional relevant provider to a retail client is taken to have been provided to the client by the supervisor of the provisional relevant provider (instead of by the provisional relevant provider).
A licensee is required to ensure that appropriate supervision is provided and make appropriate resources and opportunities available to enable the individual to meet the Professional Year requirements.
The Professional Year plan
The individual, supervisor and licensee must develop and agree on a plan for the person’s professional year and take reasonable steps to ensure the plan is followed.
A Professional Year plan (including any variations) must be in writing and must:
- identify the person, the supervisor, and the responsible licensee
- identify any other Adviser who will be involved in the supervision of the person, including in respect of areas of specialist expertise
- identify the period and each quarter of the Professional Year
- identify the particular work and training outcomes to be achieved by the person during the Professional Year and during each quarter
- describe the resources and opportunities that the responsible licensee will make available
- for each quarter of the Professional Year, describe in detail the work activities and the structured training to be undertaken, and
- set out any other arrangements for the Professional Year.
Minimum hours
Individuals need to gain a minimum of the full-time equivalent of one year of relevant experience before they can be authorised as an Adviser.
FASEA has determined this to be 1,600 hours split between:
- 100 hours of structured education and training, and
- 1,500 hours of work and supervised experience.
Formal education can contribute to the 100 hours of structured training requirement of the Professional Year. For example, Advisers who haven’t yet completed the Code of Ethics course will be able to count that towards their structured training. Other education and training could include:
- education for the purposes of achieving a professional designation
- education to be accredited in specific financial products, and
- education for the purposes of meeting requirements in specific financial advice provision (examples of SMSF, stockbroking and aged care are given in FASEA’s Policy Statement 10).
What needs to be completed at each Quarter
The Professional Year is split into four quarters, with defined conduct required to be demonstrated in each quarter.
The requirements are, for the most part, sequential. The work activities and structured training planned for each quarter need to be completed before moving to the next.
There is an additional obstacle; Quarter 3 cannot commence until the individual has passed the FASEA Exam.
Ethical dilemmas
To ensure the person is able to demonstrate a knowledge and understanding of the Code of Ethics and an ability to resolve ethical issues in an appropriate way, for each of Quarters 3 and 4, the work activities must include identifying and resolving at least two dilemmas (ethical dilemmas) relevant to practice as an adviser.
Completion certificates
At the end of each quarter, an individual’s supervisor must give a completion certificate certifying satisfactory completion of the work for that quarter before the next quarter can commence.
The supervisor must apply the following general criteria in assessing whether to give an individual a completion certificate for a quarter:
- whether the individual has completed and maintained his or her logbook for the quarter,
- the number of hours of work activities and structured training the individual has undertaken, in accordance with the Professional Year plan, up to the end of the quarter,
- the extent to which the individual has achieved the particular work and training outcomes set out in the Professional Year plan for the quarter,
- the extent to which the individual is capable of satisfactorily completing the work and structured training for the next quarter,
- for Quarters 3 and 4—whether the individual’s identification and resolution of the ethical dilemmas demonstrate the ability to identify ethical issues and resolve them appropriately, and
- whether the individual has achieved satisfactory progress against the requirements of his or her Professional Year plan, including satisfactorily addressing areas for further development.
A Final Certificate must be issued upon completion of quarter 4, provided the individual has completed the required hours of work activities and structured training, and has passed the Exam.
Financial Advisers Register (FAR) obligations
In addition to meeting the work and training requirements of the professional year, licensees have specific obligations to update the Financial Advisers Register (FAR).
A person undertaking the professional year is recorded on the FAR as a provisional relevant provider. This status must be reflected accurately and kept up to date throughout the professional year.
There is no requirement to notify ASIC when a professional year commences. However, licensees must ensure the FAR is updated at key points, including:
- when the adviser is first authorised as a provisional relevant provider
- if there are changes to their authorisation or supervision arrangements
- when the professional year is completed
- if the adviser ceases to be authorised
Where a professional year is completed early under an acceleration arrangement, this must also be reflected in the FAR update.
Maintaining accurate FAR records is a core compliance obligation. Inaccurate or delayed updates may create regulatory risk, particularly where an adviser’s status is not clearly disclosed.
Further information on FAR obligations is available from ASIC.
The licensee’s validation
To validate the completion of the Professional Year Plan, the licensee must also conduct an audit of at least five client files on which the individual worked during their Professional Year and be satisfied that the individual can be relied on to comply with applicable legal and regulatory requirements applicable to the provision of personal advice to retail clients in relation to relevant financial products.
Record-keeping
Licensees can determine how they record advisers’ compliance with PY requirements and should develop the templates and systems they require. Treasury has provided some highly relevant guidance.
An individual is required to complete and maintain accurate records (a logbook) of:
- the hours spent on work activities and structured training during his or her Professional Year,
- details of the work activities and structured training undertaken, and
- notifications given to clients.
A Supervisor must:
- be satisfied that the logbook is complete and accurate
- keep detailed records of their assessments and the reasons for those assessments
The Licensee is responsible for:
- making complete and accurate records to be satisfied as required for the purposes of issuing a completion certificate.
These records must be kept for at least 7 years after the date it was documented.
Practical considerations for licensees and supervisors
While the professional year is defined in legislation, its application in practice requires judgement. Licensees and supervisors should focus on when the professional year is required, how it is managed, and where compliance risks typically arise.
When a professional year is required
A professional year is generally required where a person is entering the profession and seeking to provide personal advice to retail clients for the first time.
However, it may also be required where an individual:
- has not previously met the education and training standards
- is returning to advice after a period of non-authorisation
- cannot demonstrate that they have maintained the required competencies
In these cases, the individual may need to be authorised as a provisional relevant provider and complete a professional year before providing advice independently.
Common failure points
In practice, issues with the professional year often arise from poor implementation rather than misunderstanding of the rules. Common failure points include:
- inadequate supervision, particularly in early quarters
- incomplete or poorly documented professional year plans
- insufficient structured training hours or lack of evidence
- allowing advisers to operate beyond their permitted level of autonomy
- failing to clearly disclose provisional status to clients
These issues can expose both the licensee and supervisor to regulatory risk.
Key licensee risks
Licensees are responsible for ensuring that professional year requirements are met before an adviser is authorised to provide advice independently.
Key risk areas include:
- authorising an adviser too early or without sufficient evidence of competence
- failing to maintain appropriate supervision arrangements
- inaccurate or delayed updates to the Financial Advisers Register
- inadequate record-keeping to demonstrate compliance with the PY standard
These risks are heightened where the professional year is treated as a procedural step rather than a structured training program.
Acceleration considerations
The professional year may be completed in less than 12 months if the licensee is satisfied that the adviser has met all requirements earlier.
Acceleration should be approached cautiously. Before approving early completion, the licensee should be able to demonstrate that:
- all required work and training hours have been completed
- the adviser has demonstrated competence across all relevant areas
- supervision has been appropriately reduced over time
- the adviser is capable of providing advice independently
Acceleration without clear supporting evidence is a common area of regulatory concern.
Quick questions (and quicker answers)
Q – How do I notify ASIC of acceleration or completion?
A – AFS licensees can notify ASIC through the ASIC Regulatory Portal by:
- completing an ‘Assessment of eligibility to sit exam – provisional relevant providers’, and
- submitting a certified copy of the final transcript of the new financial adviser’s approved degree. If the approved degree does not include a course in ethics, an AFS licensee should also submit a certified copy of the final transcript of an approved ethics for professional advisers bridging course.
Note, your documents need to be certified as per ASIC’s certification requirements. Please refer to ASIC – Eligibility to sit the exam for more information.
ASIC’S PY User Guide
Q – How do I update the Register and Provisional Adviser details once the PY has been completed?
A – Once a Provisional Adviser is authorised by the Licensee, you can update their authorisations through ASIC Connect.
This way, they retain their AR number and their PY commencement date.
No. Completing the professional year is necessary, but it is not enough on its own. To provide unsupervised personal advice to retail clients on relevant financial products, you also need to have completed an approved bachelor’s or higher degree, or equivalent qualification, passed the financial adviser exam, been authorised by an AFS licensee to provide personal advice, and had your registration application approved by ASIC. ASIC’s guidance is explicit on this point. PY completion is only one part of the pathway to becoming a fully authorised relevant provider.
This is an important distinction for licensees and supervisors. A person may have completed their work and training requirements, but they still cannot lawfully move into unsupervised practice unless the rest of the professional standards framework has also been satisfied and the registration step has been completed.
The main change is institutional, not substantive. FASEA ceased operation on 14 December 2021, but the professional standards framework did not disappear with it. The standards that were made under that regime, including the professional year framework, continued in force unless and until they were amended or replaced. Treasury now maintains the broader policy framework, while ASIC administers and oversees the professional standards in practice.
The professional year remains governed by the current legislative framework and administered by ASIC. In practical terms, advisers and licensees now look to ASIC for operational guidance and to legislation or Treasury materials for the underlying standards framework.
Acceleration is only available in a limited way. ASIC states that your AFS licensee may accelerate the first quarter, the second quarter, or both, if the supervisor is satisfied that you have achieved the outcomes for that quarter and are capable of satisfactorily completing the work activities and structured training for the next quarter.
The third and fourth quarters cannot be accelerated. Even where acceleration is used, the full 1,600 hours of work and training over a 12-month period are still required.
In practice, this means acceleration should not be treated as a shortcut. It is appropriate only where there is clear evidence that the adviser has already demonstrated the required competencies for the earlier quarter and can safely progress to the next stage. If the file does not show how the supervisor reached that conclusion, or if the adviser is being moved ahead simply because the business needs capacity, the acceleration decision is difficult to defend.
No. That used to be part of the old FASEA-era process, but it is no longer required. ASIC says AFS licensees are no longer required to notify ASIC of the professional year arrangement when a new financial adviser commences their professional year.
What still matters is what happens later. ASIC says licensees must notify ASIC when accelerated progression through Quarter 1 and/or Quarter 2 is granted, and must also notify ASIC when the adviser has completed the professional year and a final completion certificate has been issued. Those updates are made through the Financial Advisers Register process. So the compliance obligation has shifted away from notifying of commencement and toward accurately recording the adviser’s status and progression.
The most common failures are usually implementation failures rather than misunderstandings of the law. Problems often arise where a licensee allows an adviser to progress too quickly without evidence that quarter outcomes have been met, treats acceleration as an operational convenience rather than a competency-based decision, or fails to keep the adviser’s status on the Financial Advisers Register up to date. These are the kinds of issues that create avoidable regulatory risk because they suggest the professional year is being managed as a formality rather than as structured work and training.
Another recurring problem is assuming that once an adviser has passed the exam or finished the PY, they are automatically ready for unsupervised advice. ASIC’s framework is more demanding than that. You need the qualification standard, the exam, the professional year, AFS licensee authorisation, and ASIC-approved registration. If any one of those elements is missing, the adviser is not yet in a position to provide unsupervised personal advice.
A further trap exists for some existing advisers who fell out of the regime and later seek to return. ASIC’s guidance makes clear that, in some circumstances, a person who loses relevant provider status and has not met the required standards may need to undertake the professional year, pass the exam and meet the qualification standard before they can be authorised again. That makes careful status checking and transition planning especially important for licensees managing returning advisers.
