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Financial Adviser Standards and Ethics Authority Limited—Report for 2020-21


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1

ANNUAL

REPORT

2020-2021

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On the 9 December 2020 the Government announced that FASEA’s functions would be

transferred to the Treasurer and ASIC and FASEA would be wound up.

Legislation to enact this was contained in the Financial Sector Reform (Hayne Royal

Commission Response- Better Advice) Bill 2021 (the Bill).

At the time the FASEA Annual Report for 2020- 2021 (including financial statements) was

signed, the Bill had passed through the House of Representatives and had received

bipartisan support. On this basis the FASEA Annual Report for 2020-2021 was prepared on

the assumption that either the Bill would pass through the Senate in the second half of the

year or that the Government would give effect to its announcement of 9 December 2020 by

other means.

FINANCIAL

ADVISER

STANDARDS AND

ETHICS

AUTHORITY

LIMITED

ABN 48 618 495 828

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Contents

From the Chair and the CEO................................................................................................................... 4

Our Purpose.............................................................................................................................................. 7

Standards Development Program ............................................................................................................ 8

Management and Accountability ........................................................................................................... 11

Company Structure ............................................................................................................................ 11

Organisational Structure .................................................................................................................... 11

Audit and Risk Committee (ARMC) .................................................................................................... 12

Functions Review Committee (FRC) ................................................................................................... 12

External Audit ..................................................................................................................................... 12

Funding ............................................................................................................................................... 12

Directors’ Report .................................................................................................................................... 14

Our Board ............................................................................................................................................... 19

Senior Management ............................................................................................................................... 21

Auditors Independence Declaration ...................................................................................................... 22

Independent Auditors Report ................................................................................................................ 23

Directors' Declaration ............................................................................................................................. 26

Financial Report ...................................................................................................................................... 27

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From the Chair and the CEO

We are pleased to present the fourth and final annual report of the Financial Adviser

Standards and Ethics Authority (FASEA) to our Minister, Minister for Superannuation,

Financial Services and the Digital Economy, Minister for Women’s Economic Security.

Senator the Honourable Jane Hume, the representative of our member, the

Commonwealth of Australia.

During the 2020/2021 year, FASEA continued to build on the work undertaken in previous

years in addressing its core purpose of implementing the Commonwealth’s Corporations

Amendment (Professional Standards of Financial Advisers) Act 2017. This Act amended

the Corporations Law with the intent of raising professional and education standards for

financial advisers. In doing so, the parliament intended that the legislation would lead to

a rebuilding of trust and confidence in the sector and the meeting of consumers’ need

for quality advice delivered by a professional, trusted cohort.

FASEA has made excellent progress in discharging its functions set by parliament in

Section 921U of the Corporations Act to assist in advancing the professionalism of the

financial advice sector and creating better outcomes for consumers, while at times

weathering resistance from within the financial advice industry.

Pleasingly, at the end of June 2021, 14,850 advisers, (representing close to 70% of current

advisers on the Financial Advisers Register (FAR)), have passed the relevant providers

exam.

Working with the exam administrator (ACER), FASEA was able to react proactively and in

a short space of time to challenges presented by COVID-19 lockdowns through an

expansion of the remote online offering of the exam as an alternative to physical sittings.

This enabled FASEA to offer existing and new relevant providers extensive opportunity to

prepare and sit within the statutory transition period, with 12 sittings offered since the

exam was introduced in June 2019. To date over 4,000 advisers have sat the exam

remotely and analysis of results indicates the performance of advisers taking the exam

remotely is consistent with those advisers in physical locations.

The exam is an achievable exam for competent relevant providers regardless of their

specialization. The overall pass rate of 89% is a credit to the industry and demonstrates

that those who have passed have the skill to apply their knowledge of advice

construction, ethics, and legal requirements for financial advice to the practical scenarios

tested in the exam, providing reassurance to consumers.

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During 2020/2021, FASEA introduced some additional support mechanisms for financial

advisers sitting the exam including enhanced feedback, pre and post exam webinars,

identification of areas of underperformance and the creation of a listing showing those

financial advisers who have passed the exam. These enhancements are all aimed at

providing advisers with as much support as possible particularly for those who find exam

settings challenging and to enable advisers to demonstrate to their clients that they have

the required competencies to provide financial advice.

It has also been pleasing to note, through our annual return process with higher

education providers, that in 2020 there were over 33,000 enrolments in units of studies

in FASEA approved degrees, an increase from 12,000 units in 2019. This demonstrates

that advisers have embraced the education requirements and are undertaking approved

study to uplift their education standards in line with the vision of Parliament’s

Corporations Law amendments. In addition to those existing advisers undertaking study

there have been over 450 new entrants who have commenced their Professional Year,

FASEA continues to work with key stakeholders in relation to the Code of Ethics (COE),

through both consultation on COE Guidance (late 2020) and current targeted

consultation in relation to Standard 3 of the COE. The Board understands the challenges

faced by many in implementing a COE, particularly in an industry where none previously

existed and will continue to consult through to its wind up with key stakeholders to

ensure there is clarity and understanding and that the COE can be effectively

implemented.

Operationally, FASEA maintains a small, dedicated team of 10 with technical and

management expertise who have managed a significant and complex workload within

tight legislative timeframes. Work has included the development and maintenance of

standards, assessment and accreditation of higher education degrees and courses and

overseeing the running of the exam. The team has, continued to assist advisers

understand their education, training, and ethical requirements with over 570 foreign

qualifications and 370 domestic degrees assessed and over 10,000 queries responded to.

We thank this dedicated and expert FASEA staff, whose substantial efforts have produced

a significant volume of high-quality work which has been essential to the delivery of

FASEA’s functions.

We would particularly like to highlight the work and commitment of FASEA’s Directors

past and present . Each Director brought with them a unique skill set which has ensured

that the development of education, training and ethical standards was considered and

balanced. The diversity of our Board has enabled it to consider issues from educational,

ethical, consumer and industry perspective and significant time and work commitments

have been contributed by directors to enable the delivery of this intense and urgent

program of standards. Their contribution has been invaluable, and we thank them all for

their dedication to the important work of FASEA.

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Rebuilding trust and confidence is an important task for the sector. There are positive

signs from the financial adviser community that this is being embraced. This will enhance

financial advice offerings to consumers and the economy at large The next six months

will see FASEA transfers its functions to the Minister and ASIC with a focus on ensuring

a smooth transition so that the framework implemented by FASEA may continue to

evolve.

Catherine Walter AM, Stephen Glenfield,

Chair Chief Executive Officer

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Our Purpose

The Financial Adviser Standards and Ethics Authority (FASEA) is a Commonwealth entity

that was established in April 2017 to set standards for the ethical conduct, educational

qualifications, and ongoing training of licensed financial advisers in Australia. FASEA’s

powers and responsibilities are set out under the Corporations Act 2001 (the Act).

Under the Act, FASEA is responsible for: • Setting a Code of Ethics that all advisers must comply with in providing advice to

consumers about financial products or services; • Approving university Bachelor or higher-level degrees or equivalent qualifications

to ensure all advisers meet minimum knowledge and training requirements set by

FASEA to advise consumers on financial products and services; • Approving foreign qualifications to ensure advisers qualified, or who trained

overseas, and who provide advice to consumers in Australia, meet FASEA

standards; • Approving an exam to ensure all advisers meet subject matter knowledge and skills

requirements set by FASEA; • Selecting an appropriate common term for provisional relevant providers who are

undertaking at least one year of work and training; • Setting standards for the future education and training (continuous professional

development (CPD)) requirements that advisers must complete each year so their

knowledge remains current, and they can retain their authorisation to advise

consumers about financial products and services; and • Determining the requirements for the professional year.

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Standards Development Program

Consistent with FASEA’s planned program of work, our principal achievements included

the following:

a) Implementation of Standards

Developed, consulted, and implemented the seven standards as required by

S921U of the Corporations Act.

1. Approve bachelor or higher degrees, or equivalent qualifications, for the

purposes of paragraph 921B(2)(a).

• Accredited a wide range of Higher Education Provider (HEP) degrees and

courses that meet the FASEA curriculum standard including 78 historical

courses, 67 current Bachelor or higher degrees and 54 bridging courses. • Recognised Prior Learning (RPL) for existing advisers by approving education

undertaken to attain a professional designation for 8 professional associations. • Commenced program of reaccreditation of approved degrees and continued

to approve new degrees at both postgraduate and undergraduate levels. • Approved 27 HEP’s based in all states and territories across Australia exception

being Northern Territory. • Undertook joint accreditations with TEQSA for non-self-accrediting HEP’s.

Annual Returns for 2020 indicated over 33,000 enrolments in award units and

bridging courses by existing and new advisers.

2. Approve and administer an exam for the purposes of subsection 921B(3).

• Developed and delivered an exam for relevant providers that assessed required

competencies across the following areas:  Financial Advice Regulatory and Legal requirements (including

Corporations Act chapter 7, AML, Privacy and Tax Agents Services

Act (TASA) 2009  Financial Advice Construction - suitability of advice aligned to

different consumer groups, incorporating consumer behaviour

and decision making·  Applied ethical and professional reasoning and communication

- incorporating FASEA Code of Ethics

• Over 850 individual exam sittings across 12 exams in both regional and

metropolitan locations, including 4,000 advisers who have sat the exam

remotely. • 16,772 advisers have sat the exam with 14,854 passing, representing 70% of

current advisers on the Financial Advisers Register (FAR).

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• An overall pass rate of 9 in 10 advisers passing regardless of number of sittings. • Delivered enhanced Exam feedback for advisers who were unsuccessful,

highlighting areas where performance was not at expected competencies. • Conducted pre and post Exam webinars to support existing advisers in

preparing for their exam sitting and understanding the underperforming

areas. With 5,000 participants attending the sessions.

3. Set requirements for work and training for the purposes of subsection 921B(4).

• Designed, consulted, and developed the Professional Year (PY) Standard

including supporting tools and templates. • Registered over 400 new entrants to financial advice. • Developed a PY workshop for PY candidates, their supervisors, and licensees

to better understand the requirements of the PY standard.

4. Set requirements for continuing professional development (CPD) for the

purposes of subsection 921B(5) in relation to the CPD year of a financial services

licensee, the period mentioned in subsection 1546E(5), or any other period

determined by the standards body.

• Designed, consulted, and developed the CPD Standard including supporting

tools and templates. • Provided relief for advisers in meeting CPD requirements emerging from

COVID-19 challenges.

5. Specify a word or expression to refer to a provisional relevant provider.

• Established the appropriate term for relevant providers undertaking their

professional year.

6. Make a Code of Ethics for the purposes of section 921E.

• Designed, consulted, and developed the Code of Ethics Standard including

supporting guides. • Received and considered 55 submissions in relation to the Code of Ethics

including the draft legislative instrument. • Held extensive workshops and consultation forums between March and

December 2019. • Provided updated guidance in relation to the COE in 2020 with targeted

consultation on standard 3 of the Code in progress.

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7. Approve or refuse to approve foreign qualifications when an application is

made under subsection 921V (1) for approval of a foreign qualification.

• Designed, consulted, and developed the foreign qualification Standard

including supporting tools and templates. • Provided assessment services for over 570 foreign qualifications for

equivalence with a FASEA approved degree.

b) Operations

• Development and maintenance of the automated Education Pathways tool

with over 13,600 uses of the tool. • Assisted over 370 advisers to understand their education requirements by

reviewing their previously completed education against the education

pathways. • Enhanced the enquiries function on our website with over 10,000 enquires

responded to. • Attendance and presentation at numerous industry forums to assist with

understanding and implementation of the standards • With FASEA’s proposed wind up on the 31 December 2021 the focus for FY22

will be to ensure the continued implementation of the education and ethical

standards and the smooth transition to ASIC and the Minister of FASEA’s

functions.

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Management and Accountability

Company Structure

FASEA is a public company limited by guarantee. It was incorporated in the Australian

Capital Territory in 2017. The sole member is the Commonwealth of Australia,

represented by the Minister for Superannuation, Financial Services and the Digital

Economy, Minister for Women’s Economic Security. Senator the Honourable Jane Hume.

FASEA is overseen by a Board of Directors which are appointed by the Minister. The

Board is responsible to the Minister for the governance of FASEA. Its directors do not have

any executive roles and are not responsible for the day-to-day operation and function of

FASEA.

In accordance with the FASEA Constitution, the Board submits a Business Plan, Budget,

and Annual Report to the Minister each financial year.

Organisational Structure

The CEO leads an executive team with expertise in standards development, finance,

operations, consultation, and education accreditation and assessment.

FASEA has 10 (9 fulltime, 1 part time) employees, based in Australia with a 50%/50% gender split between male and female.

There are two Board sub-committees. The responsibilities of each is set out below.

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Audit and Risk Committee (ARMC) This Committee has the following responsibilities:

• Providing independent assurance in relation to FASEA's financial reporting, risk oversight and management, systems of internal control, compliance with relevant laws and policies and compliance with the PGPA Act performance reporting framework;

• Providing advice and making recommendations to the Board in respect of these matters; • Reporting financial and regulatory information; • Monitoring the internal control system; • Monitoring the risk management system; • Monitoring of outsourced providers; and • Monitoring compliance with applicable laws, regulations, standards, and best

practice guidelines.

Functions Review Committee (FRC) This Committee has the following responsibilities:

• Reviewing the required standards (and related documents); • Providing overall direction for the standards project, including setting, and agreeing to objectives, approaches, and outcomes; • Reviewing the existing standards (and related documents); • Preparing and designing consultation processes including outcomes of

consultations on particular standards; • Providing assistance and advice to the relevant executives; • Identifying issues and risks that impact the standards project and communicating

these to the FASEA staff and the Board; • Communicating critical decisions, documents, and deliverables from the standards project to the FASEA staff and the Board; and • Working towards resolving issues and where these cannot be resolved,

recommending possible solutions to the Board.

External Audit The financial statements of FASEA are audited annually in accordance with FASEA’s

Constitution and the Corporations Act. The Australian National Audit Office (ANAO) is the

external auditor for FASEA. Representatives of the external auditor are invited to attend

meetings of the ARMC.

Funding FASEA received industry funding of $3.9 million annually under a contract which expired

on 30 June 2021. Funding was intentionally short-term to cover the establishment of

FASEA and its initial period of operation to enable it to fulfil its legislative timelines.

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As a result of The Financial Sector Reform (Hayne Royal Commission Response- Better Advice) Bill 2021 (expected to be passed by Parliament in late 2021), FASEA will

transfer its functions to ASIC and Treasury and wind up on 31 December 2021. With the expiration of the funding agreement, $2.5m has been allocated in the budget to

Treasury to fund FASEA operations between 1 July 2021 to 31 December 2021. The

funding will be provided in quarterly instalments.

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Directors’ Report The Directors submit the FASEA Directors’ report for the financial year ended 30 June 2021.

Directors

Catherine Walter AM (Chair)*

Mark Brimble

Carolyn Bond AO

Deborah Kent

Simon Longstaff AO

Elissa Freeman

Louise Lakomy

Will Hamilton

*Re-appointed on 11 April 2021 for a 3-year term

Responsible Minister The Minister responsible for FASEA is the Minister for Superannuation, Financial Services

and the Digital Economy and the Minister for Women’s Economic Security, Senator the

Honourable Jane Hume.

Company Secretary Kathryn Kerr and Amelia Constantinidis each hold the position of Company Secretary.

Membership There is one Member, the Commonwealth of Australia as represented by the Minister for

Superannuation, Financial Services and the Digital Economy and the Minister for Women’s

Economic Security, Senator the Honourable Jane Hume. On a winding up the Member is

required to contribute not more than $10.00.

Principal Business The principal business of FASEA during the financial year was to be the standards body

under the Corporations Act 2001 and to set the education, training, and ethical standards

of financial advisers in Australia.

On the 9 of December 2020, it was announced that FASEA will be wound up and its

standard-making functions moved to be the responsibility of the Treasurer, supported by

Treasury, with ASIC taking over responsibility for administration of the relevant providers

exam.

On 24 June 2021 the Financial Sector Reform (Hayne Royal Commission Response- Better

Advice) Bill 2021 was introduced into parliament, this Bill is expected to be passed by

Parliament in late 2021. The Bill details that FASEA’s standard setting functions would

effectively transfer to the Treasurer (supported by Treasury) by 31 December 2021. As a

result, FASEA activities during the year have expanded to include transitioning of key

functions.

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FASEA’s Objectives

FASEA’s paramount aim or objective is to improve consumer trust and confidence by raising

the ethical, professional, and educational standards of financial advisers. To give effect to

this, FASEA has set itself several short and longer-term objectives and the strategies by

which it has met or proposes to meet these objectives.

Principal Activities 2020/21

Consistent with FASEA’s 2020-21 business plan, our principal activities for the period

involved the following:

• Consulting on the Code of Ethics Guidance; • Providing guidance to new entrants and existing advisers about the pathways to

achieving the required qualifications, training, and experience to meet FASEA

standards, including what meets the equivalence test, whether any additional

bridging course is required and what name they can use to describe themselves

while qualifying as advisers; • Accrediting educational programs and courses that will meet FASEA’s standards; • Approving exams to ensure advisers meet knowledge and skills requirements and

assessment under FASEA’s standards; • Preparing and consulting with key stakeholders in roundtables or other targeted

consultation about drafts of legislative instruments embodying the Code and

standards to refine these as appropriate; • Finalising legislative instruments embodying the Code and standards for

parliamentary consideration; • Periodically consulting with key stakeholders and reviewing the Code and standards

to assess their efficacy; and • Working with ASIC and Treasury to transition FASEA’s standard-making functions as

a result of The Financial Sector Reform (Hayne Royal Commission Response- Better Advice) Bill 2021 (expected to be passed by Parliament in late 2021), that provides for the transfer of FASEA standards making functions effective 31 December 2021.

FASEA has successfully achieved these objectives in the 2020/21 financial year.

FASEA’s Objectives and Strategies in FY22 until it is wound up on 31 December 2021 is to:

• Maintain regular communication with stakeholders around FASEA standards,

including key transition dates relating to those standards and Corporations Law

requirements (including exam timeframes, code of ethics compliance and

education requirements); • Undertake continued consultation with key stakeholders to assist in development of

guidance notes in relation to FASEA standards; • Prepare and release updated information to assist stakeholders’ understanding of

FASEA’s standards; and • Continue to review and accredit educational programs and courses that meet

FASEA’s standards.

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• Assess applications from professional associations for recognition of prior learning

credit approval for coursework undertaken to acquire a professional designation. • Develop and administer exams as contemplated by Section 921U (2). • Assess applications for approval of foreign qualifications received from existing and

new advisers. • Periodically review the Code and standards, including consultation with

stakeholders to assess their efficacy. • Work with Treasury and ASIC to complete transition of FASEA’s standards setting

functions to ASIC and Treasury by 31 December 2021

Operating Trading Result The net deficit for the year ended 30 June 2021 was $1,405,900. In the previous year ending

30 June 2020 there was a net surplus of $262,355.

Under the terms of its Funding Agreement with contributors FASEA received annual

funding of $3,900,000 in quarterly instalments of $975,000. FASEA utilised this funding to

meet its obligations in implementing the Commonwealth’s Corporations Amendment

(Professional Standards of Financial Advisers) Act 2017.

The funding agreement expired on 30 June 2021, as a condition of the funding agreement

any unspent or uncommitted contributors’ funds at the expiry of the agreement will be

returned to contributors in the proportionate share that they were paid. On the 25 August

$1,330,042 will be returned to contributors in accordance with the clause. The liability for

repayment of unspent and uncommitted contributors’ funds has been included as a liability

in the 30 June 2021 financial statements.

FASEA operations are expected to wind down by 31 December 2021, With the expiration

of the funding agreement, $2.5m has been allocated in the budget to Treasury to fund

FASEA operations between 1 July 2021 to 31 December 2021.The funding will be provided

in quarterly instalments.

Dividends FASEA is a not-for-profit company. No dividends have been paid or declared during the year

and no dividends are proposed. FASEA is prohibited by its Constitution from making a

distribution to its members.

Significant Changes in the State of Affairs On the 9 December 2020, the Minister announced as part of the Hayne Royal Commission

recommendation 2.10 to strengthen the financial advice sector that FASEA will be wound

up and its standard-setting functions moved to be the responsibility of the Treasurer,

supported by Treasury, with ASIC taking on responsibility for administration of the adviser

exam.

On 24 June 2021 the Financial Sector Reform (Hayne Royal Commission Response- Better

Advice) Bill 2021 was introduced into Parliament, this Bill is expected to be passed by

Parliament in late 2021. The Bill details that FASEA’s standard setting functions would

effectively transfer to the Treasurer (supported by Treasury) and ASIC by 31 December 2021.

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After Balance Date Events The Financial Sector Reform (Hayne Royal Commission Response- Better Advice) Bill 2021

transferring FASEA (the company) standard setting functions to the Treasurer (supported

by Treasury) and ASIC is expected to be passed by Parliament in late 2021 as a result,

operations will cease on the 31 December 2021 and the company will be wound up.

Meetings of Directors During the 2020 - 2021 financial year, 20 meetings (including sub-committees of

directors) were held. Attendances by each Director were as follows:

Board of Directors ARMC FRC

Eligible to

attend

Attended Member Attended Member Attended

Catherine Walter 7 7 N 4 N 9

Carolyn Bond 7 7 Y 4 N 0

Mark Brimble 7 7 Y 4 Y 9

Deborah Kent 7 7 N 0 Y 9

Simon Longstaff 7 7 Y 4 Y 9

Louise Lakomy 7 7 Y 4 N 9

Elissa Freeman 7 7 N 0 Y 9

Will Hamilton 7 7 N 0 N 8

Directors’ Benefits The Directors are paid such remuneration and allowances as determined by the

Remuneration Tribunal. Since incorporation, no director of the company has received or

become entitled to receive any other benefit that is not in accordance with the

Remuneration Tribunal determination.

Name Fees Superannuation

Total

Remuneration

$ $ $

Bond, Carolyn 14,534 1,381 15,915

Freeman, Elissa 22,417 2,129 24,546

Longstaff, Simon 24,518 2,329 26,847

Hamilton, William Forester 25,744 2,446 28,190

Kent, Deborah 27,324 2,596 29,920

Lakomy, Louise Maree 28,372 2,695 31,067

Brimble, Mark 38,518 3,659 42,177

Walter, Catherine 60,362 5,735 66,097

Total 241,789 22,970 264,759

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Name Salary Superannuation Annual

Leave

Redundancy Total

Remuneration

Stephen Glenfield $370,636 $29,364 $24,167 $163,915 $588,082

Kathryn Kerr $315,041 $24,960 ($1,501) $127,386 $465,886

Total $685,677 $54,324 $22,666 $291,301 $1,053,968

Indemnities and Insurance Premiums During the financial year, in accordance with the Corporations Act, FASEA entered a

Directors and Officers insurance policy with an insurer, Comcover. The policy covers

directors and executive officers against any claims or liabilities arising from claims against

them in any third-party legal proceedings in respect of their conduct while acting in the

capacity of director or executive of FASEA.

There are no claims of which FASEA is aware that are pending against any director or officer.

Environmental Issues The company’s operations are not regulated by any significant environmental regulations

under a law of the Commonwealth or of a state or territory.

Proceedings on behalf of the Company No person has applied for leave of Court to bring proceedings on behalf of the company or

intervene in any proceedings to which the company is party for the purpose of taking

responsibility on behalf of the company for all or part of those proceedings.

The company was not a party to any such proceedings during the year.

Ministerial Directions and Government Policy Orders

On 24 June 2021 the Financial Sector Reform (Hayne Royal Commission Response- Better

Advice) Bill 2021 was introduced into parliament, this Bill is expected to be passed by

Parliament in late 2021. The Bill details that FASEA’s standard setting functions would

effectively transfer to the Treasurer (supported by Treasury) and ASIC by 31 December 2021.

There were no other directions issued to the company by the Responsible Minister under

the company’s constitution or under any Act or instrument.

Signed in accordance with a resolution of the Board of Directors

Catherine Walter AM Simon Longstaff AO

Chair Director

23 August 2021 23 August 2021

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Our Board The Board of the Financial Adviser Standards and Ethics Authority Limited is appointed by

The Minister responsible for FASEA is the Minister for Superannuation, Financial Services

and the Digital Economy and the Minister for Women’s Economic Security, Senator the

Honourable Jane Hume.

Catherine Walter AM (Chair) FAICD, LLB(Hons), LLM MBA Catherine is the Chairperson of FASEA. Currently Catherine is also a member of the Reserve

Bank of Australia’s Payments System Board, Chair of Melbourne Genomics Health Alliance,

a Director of Australian Foundation Investment Company and Trustee of the Helen

Macpherson Smith Trust.

She has previously been Managing Partner of the Melbourne office of Clayton Utz and

Commissioner of the City of Melbourne, a member of the Financial Reporting Council and

has served on the boards of ASX, National Australia Bank, Orica, and Victorian Funds

Management Corporation.

Dr Mark Brimble PhD, B.Com (Hons) Mark is the FASEA Director with experience in designing, or the requirements of, education

courses or qualifications. Mark is a Professor (Finance) at Griffith University and is an Office

for Learning and Teaching National Fellow and is the recipient of numerous teaching and

learning grants, citations, and awards. Mark was awarded Australian Teaching and Learning

Council Citations in 2011 and 2016, and an Australian Award for Teaching Excellence in

2016.

Dr Brimble is a Fellow of CPA, a Fellow of the FINSIA, a member of the Financial Planning

Association of Australia and the Australian Institute of Company Directors. Mark has

published research in various national and international journals and is the Co-Founding

Editor of the Financial Planning Research Journal.

Carolyn Bond AO G.Dip Ed.Train Carolyn is a Director with experience in representing consumers of financial services. Carolyn

is a former Co-CEO of the Consumer Action Law Centre and former Chair of the Consumers’

Federation of Australia. She is a Director of the Financial Counselling Foundation and

currently manages a project contributing to industry policies which address the financial

impacts of family violence.

Deborah Kent Dip FP, CFP, FCHFP, MAICD Deborah is a Director with experience in carrying on a financial services business or

providing a financial service. Deborah is the Managing Director and Founder of Integra

Financial Services. She is a former President of the Association of Financial Advisers,

Treasurer of the Association of Financial Advisers, NSW State Director of the Association of

Financial Advisers and former President of Western Sydney Business Connection, and NSW

State Director of the Authorised Representative Association.

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Dr Simon Longstaff AO BEd, MPhil, PhD, FCPA, FRSN, FARPI Simon is the Director with experience in the field of ethics. He is Executive Director of the

Ethics Centre and is an Adjunct Professor at the AGSM, UNSW Business School. Simon

holds independent advisory positions with a number of organisations. He read for his

Master’s Degree and Doctorate as a Member of Magdalene College, Cambridge and has a

Bachelor’s degree in Education from the University of Tasmania.

Elissa Freeman BA, GAICD Elissa is a Director with experience representing consumers of financial services. Elissa

previously led the financial services advocacy work of Australia’s largest consumer

organisation, CHOICE, and has wide-ranging experience in consumer rights and

competition policy. She is currently a Director of the Australian Financial Complaints

Authority and was previously a Director of the Financial Ombudsman Service and Chair of

the Financial Rights Legal Centre.

Louise Lakomy MBA, GDip FP, GAICD, CFP Louise is a Director with experience in carrying on a financial services business or providing

a financial service. Currently Louise is a Director with Crystal Wealth Partners bringing over

20 years of experience and knowledge in all facets of financial planning to her role. Louise

is a Certified Financial Planner and holds a Master of Business Administration, a Graduate

Diploma in Financial Planning, and is a Graduate of the Australian Institute of Company

Directors. Louise has served as a Board member for the Financial Planning Association of

Australia (FPA), as a member on the FPA Education Council and has also been a Director of

the Financial Ombudsman Service.

Will Hamilton BBus (Acc), Grad Dip Applied Finance, MBA (Melb) SF Fin, FAICD, FHKSI Will is the Managing Partner of Hamilton Wealth Partners. Prior to this Will was the General

Manager of Wealth Services at NAB. Will previously held the position of Head of Private

Wealth Management at Goldman Sachs JBWere and prior to this was the Managing

Director and Chief Executive Officer of Deutsche Securities Asia in Hong Kong. In addition

to his qualifications, Will is a fellow of the Hong Kong Securities and Investment Institute, a

Fellow of the AICD and a Senior Fellow of FINSIA.

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Senior Management

Stephen Glenfield (Chief Executive Officer) BEc, CA Stephen has worked in financial services regulation for over three decades, most recently

as a general manager within the Australian Prudential Regulation Authority (APRA). As well

as his managerial responsibilities, Stephen was Chair of the APRA’s Superannuation Industry

Group. He has also worked with the International Organisation of Pension Supervisors, the

Victorian Financial Institutions Commission and KPMG.

Stephen holds a Bachelor of Economics from Monash University and is a member of the

Chartered Accountants Australia and New Zealand.

Kathryn Kerr (Chief Operating Officer) B. Com, MBA, CA Kathryn has over 30 years’ experience in financial services across Australia and South East

Asia, most recently as Head of Channel Optimisation at Suncorp. Kathryn’s previous

responsibilities include development and implementation of operating and financial

processes and procedures for a risk advice start up. Kathryn was also on the Board of

several CBA’s offshore life insurance operations.

Kathryn’s experience includes a broad range of finance, risk, and operational roles across

professional and financial services organisations including EY, CBA, AMP, Patronus and

Suncorp. Kathryn has a Bachelor of Commerce from UNSW; an MBA from AGSM and she is

a member of the Chartered Accountants Australia and New Zealand.

Amelia Constantinidis (Standards Director and Company Secretary) Amelia has worked in financial services for over two decades most recently in the financial

advice industry for AMP and CBA. She led the first partnership between a Financial Advice

Institution and a leading University developing unique programs for new Advisers entering

the Financial Advice profession as well as establishing a Master’s program for existing

Advisers to lift their education standard.

Amelia has held senior program roles, driving complex business transformation and

technology driven change to enhance business operations and productivity whilst

improving the customer experience.

Amelia is a Founding Member and on the Advisory Board of the Financial Executive Women.

Amelia was a member of the Financial Planning Education Council from 2013 - 2018 and

a member of the AFA Professional Standards Working Group from 2016 - 2018.

Howard Cook (Accreditation Manager) BEd Howard has worked in professional education since 1997 with Securities Institute

Education, Chartered Secretaries Australia, and the Financial Planning Association.

International experience includes working with ASEAN Banking regulators and the

Securities Institute Thailand to provide training for regulators, intermediaries, and investors.

He has also worked with Universities around Australia to accredit courses for financial

planners with the Financial Planning Education Council.

22

Auditors Independence Declaration

Ms Catherine Walter AM Chair Financial Adviser Standards and Ethics Authority Limited 133 Castlereagh Street, Sydney, NSW 2000

FINANCIAL ADVISER STANDARDS AND ETHICS AUTHORITY LIMITED FINANCIAL REPORT 2020-21 AUDITOR’S INDEPENDENCE DECLARATION

In relation to my audit of the financial report of the Financial Adviser Standards and Ethics Authority Limited for the period ended 30 June 2021, to the best of my knowledge and belief, there have been:

(i) no contraventions of the auditor independence requirements of the Corporations Act 2001; and

(ii) no contravention of any applicable code of professional conduct.

Australian National Audit Office

Mark Vial Acting Executive Director Delegate of the Auditor-General Canberra

23 August 2021

GPO Box 707 CANBERRA ACT 2601 38 Sydney Avenue FORREST ACT 2603 Phone (02) 6203 7300 Fax (02) 6203 7777

23

Independent Auditors Report

INDEPENDENT AUDITOR’S REPORT

To the members of Financial Adviser Standards and Ethics Authority Limited

Opinion

In my opinion, the financial report of Financial Adviser Standards and Ethics Authority Limited (the Company) for the year ended 30 June 2021 is in accordance with the Corporations Act 2001, including:

(a) giving a true and fair view of the Company’s financial position as at 30 June 2021 and of its performance for the year then ended; and

(b) complying with Australian Accounting Standards and the Corporations Regulations 2001 as they apply on a non- going concern basis described in Note 1.

The financial report of the Company, which I have audited, comprises the following as at 30 June 2021 and for the year then ended:

• Statement of Comprehensive Income; • Statement of Financial Position; • Statement of Changes in Equity; • Cash Flow Statement; • Notes to the financial statements, comprising a summary of significant accounting policies and

other explanatory information; and • Directors’ Declaration.

Basis for opinion

I conducted my audit in accordance with the Australian National Audit Office Auditing Standards, which incorporate the Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of my report. I am independent of the Company in accordance with the auditor independence requirements of the Corporations Act 2001 and the relevant ethical requirements for financial report audits conducted by the Auditor-General and his delegates. These include the relevant independence requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) to the extent that they are not in conflict with the Auditor-General Act 1997. I have also fulfilled my other responsibilities in accordance with the Code.

I confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Emphases of Matter - Basis of Accounting

I draw attention to Note 1 of the financial report, which describes the non-going concern basis of accounting due to the decision of Government to transfer responsibility for the Company’s operations and wind it up over the course of the 2021-22 financial year. My opinion is not modified in respect of this matter.

24

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2021, but does not include the financial report and my auditor’s report thereon.

My opinion on the financial report does not cover the other information and accordingly I do not express any form of assurance conclusion thereon.

In connection with my audit of the financial report, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.

Directors’ responsibility for the financial report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 as they apply on a non-going concern basis described in Note 1 and for such internal control the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Company to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. These matters are disclosed in Note 1 to the financial report.

Auditor’s responsibilities for the audit of the financial report

My objective is to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian National Audit Office Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.

As part of an audit in accordance with the Australian National Audit Office Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also:

• Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors’ use of the non-going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

I communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

25

I also provide the directors with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, actions taken to eliminate threats or safeguards applied.

Australian National Audit Office

Mark Vial Acting Executive Director

Delegate of the Auditor-General

Canberra

23 August 2021

GPO Box 707 CANBERRA ACT 2601 38 Sydney Avenue FORREST ACT 2603 Phone (02) 6203 7300 Fax (02) 6203 7777

26

Directors' Declaration

In the opinion of the Directors of Financial Adviser Standards and Ethics Authority Limited:

a) The financial statements and notes, set out in the 2021 Annual Report are in accordance with the Corporations Act 2001, including:

i. Giving a true and fair view of the financial position of the Company as at 30 June 2021 and performance, as represented by the results and cash flows, for

the year ended on that date;

ii. Complying with the Australian Accounting Standards, including Australian Accounting Interpretations and the Corporations Regulations 2001; and

iii. Have been prepared on a non-going concern basis as the company will be wound up on 31 December 2021; and

b) There are reasonable grounds to believe that the Company will be able to pay its

existing debts when they become due and payable taking into consideration FASEA

proposed wind up on 31 December 2021.

Signed in accordance with a resolution of the Directors

Catherine Walter, AM

Chair

Financial Adviser Standards and Ethics Authority Limited Board

23 August 2021

27

Financial Report

Financial Adviser Standards and Ethics Authority Limited

Statement of Comprehensive Income for the year ended 30 June 2021

Note 2021 2020

$ $

Income

Revenue from Contributors

3,900,000 3,900,000

Return of Contributors funds (1,330,042) -

Other income

40,609 239,233

Total Income 3 2,610,567 4,139,233

Expenses

Board related expenses 4 249,983 409,970

Employee benefits expense 4 2,806,858 2,228,020

Occupancy expenses 4 351,553 346,599

Supplier expenses from ordinary activities 4 608,073 892,289

Total expenses

4,016,467 3,876,878

Surplus/(Deficit) from ordinary activities

(1,405,900) 262,355

Total Comprehensive Surplus/(Deficit)

(1,405,900) 262,355

The above statement should be read in conjunction with the accompanying notes.

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Statement of Financial Position as at 30 June 2021

2021 2020 Note $ $

Assets

Current Assets

Cash and cash equivalents 8 2,470,440 2,338,220

GST receivable

22,784 27,387

Other Assets

37,419 44,912

Total Assets

2,530,643 2,410,519

Liabilities

Current Liabilities

Trade and other payables 9 468,512 886,427

Return of Contributors funds 3 1,330,042 -

Employee provisions 10 702,057 88,160

Total Liabilities

2,500,611 974,587

Net Assets

30,032 1,435,932

Equity

Retained surplus

30,032 1,435,932

Total Equity

30,032 1,435,932

2021 2020

Statement of changes in equity for the

year ended 30 June 2021

$ $

Retained Surplus Opening Balance

1,435,932 1,173,577

Total comprehensive surplus/ (deficit) for

the period

(1,405,900) 262,355

Balance on 30 June 2021

30,032

1,435,932

The above statement should be read in conjunction with the accompanying notes.

29

Statement of Cash Flows for the year ended 30 June 2021

Note 2021 2020

$ $

Cash Flow from Operating Activities

Cash received

Receipts from Contributors 3,188,601 3,847,501

Other income 37,891 225,597

Interest received 2,937 13,308

Total cash received 3,229,429 4,086,406

Cash paid

Payments to suppliers

720,434 1,124,787

Payments to employees, contractors, and

directors

2,376,775

2,706,784

Total cash paid

3,097,209 3,831,571

Net Cash Flow from Operating Activities 11 132,220 254,835 Cash and cash equivalents at start of the financial year 2,338,220 2,083,385 Cash and cash equivalents at end of the financial year 2,470,440 2,338,220 The statement of cash flows should be read in conjunction with the accompanying notes.

30

Notes to the Financial Statements for the period ended 30 June 2021

Financial Adviser Standards and Ethics Authority Limited (the company) is a not-for-profit

public company limited by guarantee, incorporated in Australia. The Company has one

member - the Commonwealth of Australia, represented by The Minister for Superannuation,

Financial Services and the Digital Economy and the Minister for Women’s Economic

Security, Senator the Honourable Jane Hume.

The company was established in April 2017 to set standards for the ethical conduct,

educational qualifications, and ongoing training of licensed financial advisers in Australia.

1. Basis of Preparation

The Financial Sector Reform (Hayne Royal Commission Response- Better Advice) Bill 2021is

expected to be passed by Parliament in late 2021 and will effectively transfer FASEA

standard setting functions to the Treasurer (supported by Treasury) and ASIC. As a result,

the company’s operations will cease on the 31 December 2021 and the company will be

wound up.

Accordingly, the financial statements are prepared on a non-going concern basis as it is

expected that all operations will cease by 31 December 2021. The directors have applied

the requirements of paragraph 25 of AASB 101 Presentation of Financial Statements which

states that “When the financial report is not prepared on a going concern basis, that fact

shall be disclosed, together with the basis on which the financial report is prepared and the

reason why the entity is not regarded as a going concern”.

Under the non-going concern basis of accounting, assets and liabilities are measured at fair

value. As the wind up is still subject to member approval the anticipated legal and

liquidation costs have not been accrued in the financial statements.

Under the non-going concern basis of accounting, all assets and liabilities are classified as

current. In adopting the non-going concern basis of accounting, the directors have

continued to apply the disclosure requirements of Australian Accounting Standards, to the

extent they are relevant to the non-going concern basis, and have modified them where

this is considered appropriate

The funding agreement that had provided FASEA with approximately $15.6m of funding,

paid in quarterly instalments commencing on 1 July 2017 expired on 30 June 2021. A key

component of the funding agreement was that any unspent or uncommitted funds should

be returned to contributors within 40 days of the expiration of the agreement. A total of

$1,330,042 will be returned to contributors in August 2021. The return of contributors’ funds

has been recognised as a liability for the year ended 30 June 2021.

The calculation basis for the return of funds has been calculated in accordance with clause

2.2.2 and 2.2.3 of the funding agreement, which states that all unspent and uncommitted

funds as at 30 June 2021 be returned to contributors.

31

Each contributor “will be entitled to the proportion of the repayment amount that reflects

the Contributors total Contributions paid to the FASEA as a proportion of the total Funding

paid to the FASEA.” The proportion that each contributor is entitled to has been

independently audited.

With the expiration of the funding agreement, $2.5m has been allocated in the budget to

Treasury to fund FASEA operations between 1 July 2021 to 31 December 2021 when FASEA

is wound up. The funding will be provided in quarterly instalments.

The principal accounting policies adopted are consistent with those of the previous

financial year

a)

Statement of Compliance

These financial statements have been prepared in accordance with the Corporations

Act 2001 and with the recognition and measurement requirements specified by the Australian Accounting Standards and Interpretations. The financial statements cover

the reporting period 1 July 2020 to 30 June 2021.

b) Basis of preparation

These financial statements have been prepared on an accrual basis and in

accordance with the historical cost basis. Cost is based on the fair values of the

consideration given in exchange for assets. All amounts are presented in Australian

dollars, unless otherwise noted.

On 24 th June 2021 the Financial Sector Reform (Hayne Royal Commission Response- Better Advice) Bill 2021 was introduced into parliament, this Bill is expected to be

passed by Parliament in late 2021. The Bill details that FASEA’s functions would

effectively transfer to the Treasurer (supported by Treasury) and ASIC by 31

December 2021. As a result, FASEA will cease operations on 31 December 2021 and

the business will be wound up.

As a result, the financial statements have been prepared on a non-going concern

basis of accounting. Under the non-going concern basis of accounting, assets and

liabilities are measured at fair value. As the wind up is still subject to member

approval the anticipated legal and liquidation costs have not been accrued in the

financial statements.

Cash flow forecasting indicates that FASEA has sufficient resources to pay its debts

as and when they become due and payable taking into consideration FASEA

proposed wind up on 31 December 2021.

c) Significant accounting judgements, estimates, and assumptions

The preparation of the company’s financial statements requires the Board to make

judgements, estimates and assumptions that affect reported amounts of revenues,

expenses, assets and liabilities, and the disclosure of contingent liabilities at the end

of the reporting period. The estimates and underlying assumptions are reviewed on

an ongoing basis. Revisions to accounting estimates are recognised in the period in

32

which the estimate is revised and the revision affects only that period.

The calculation basis for the return of contributors’ funds has been detailed in note

1 above. The calculation basis for employee provisions is detailed in note 2.

Adoption of new Australian accounting standard requirements

New and revised accounting standards and interpretations that were issued prior to the signing

of the financial report and were applicable to the current reporting period did not have a

material financial impact and are not expected to have significant future financial impact on

the company’s financial report. No accounting standards have been adopted earlier than the

application date as stated in the standard.

2. Summary of Significant Accounting Policies

2.1 Revenue

Revenue is measured at the fair value of the consideration received or receivable. Interest

revenue is recognised on an accrual basis using the effective interest method.

Revenue from contributors is recognised evenly over the duration of the funding agreement and

is recognised quarterly when invoices from contributors are due as this is the date that FASEA

obtains control or the right to receive contributions in accordance with AASB 1058 Income of

Not-for-Profit Entities.

The return of contributors’ funds following the end of the funding agreement as at 30 June 2021

has been included as an offset to revenue in the 30 June 2021 financial statements.

Other income includes fees paid for assessment services and is recognised as received or

receivable.

2.2 Employee Entitlements

(a) Provisions

Provision is made for the company’s liability for employee entitlements arising from

services rendered by employees to balance date. Salaries and wages and annual leave

entitlements are expected to be settled within one period. Long service leave

entitlements are not to be settled within one period, unless seven periods’ service has

been achieved. As a result of The Financial Sector Reform (Hayne Royal Commission

Response- Better Advice) Bill 2021 introduced to Parliament on the 24th June 2021

and expected to be passed by Parliament in late 2021, all roles within the Company

will be redundant, accordingly a provision for staff redundancies of $581,646 has been

established, this represents the company’s obligations to staff as at 30 June 2021.

(b) Wages and salaries

Liabilities for wages and salaries are recognised in respect of employees’ services up to

the reporting date. They are measured as the amounts expected to be paid when the

liabilities are settled. Expenses for non-accumulating sick leave are recognised when the

leave is taken and are measured at the rates paid or payable.

33

(c) Superannuation

The company’s staff are members of various defined contribution plans to which the

company must contribute. The liability for superannuation recognised at 30 June

represents outstanding contributions for the final payroll period of the financial year.

Contributions are made to employee superannuation funds and are charged as expenses

when incurred.

2.3 Cash

Includes cash on hand and on deposit with financial institutions and are stated at their nominal

value.

2.4 Financial Assets

Loans and Receivables

The company classifies its financial assets at the time of initial recognition depending on the

nature and purpose of the asset. All receivables are classified as trade and other receivables and

are expected to be recovered within 12 months.

Impairment of financial assets

Trade receivables are recognised when the company becomes party to an agreement and has

the right to receive cash. Trade receivables have 30-day terms (2020: 30 days) and are recognised

at the nominal amount due less any impairment allowance. The collectability of debts is

reviewed at the end of the reporting period and an impairment allowance is recognised.

2.5 Taxation

The company is exempt from all forms of taxation except fringe benefits tax (FBT), the goods

and services tax (GST), and payroll tax.

Revenues, expenses, liabilities, and assets are recognised net of the amount of GST, except

i) Where the amount of GST incurred is not recoverable from the ATO it is recognised

as part of the cost of acquisition of an asset or as part of an item of expense; and ii) Receivables and payables in the Statement of Financial Position are shown inclusive of

GST.

The net amount of GST recoverable from, or payable to, the ATO is included as part of

receivables or payable.

Cash flows are included in the Statement of Cash Flows on a gross basis. The GST component

of cash flows arising from investing and financing activities which is recoverable from, or payable

to, the taxation authority is classified as operating cash flows.

Payroll tax is paid based on the assessable rates and thresholds from each state jurisdiction.

34

2.6 Property, plant, and equipment

Purchases of property, plant and equipment are recognised at cost in the statement of financial

position except for purchases costing less than $5,000 which are expensed in the period of

acquisition. Property, plant, and equipment are carried at cost less subsequent accumulated

depreciation. At the end of the reporting period the company has no individual purchases above

the capitalised threshold.

2.7 Leases The company has adopted AASB 16. Under AASB 16 right- of-use assets and corresponding

lease liabilities are recognised in the statement of financial position. Straight-line operating lease

expense is replaced with a depreciation charge for right-of-use assets. The company has elected

not to recognise a right-of-use asset and corresponding lease liability for short-term leases with

terms of 12 months or less. Lease payments on these assets are expensed to the statement of

comprehensive income as incurred. The Company rents office premises that is on a month-to-month basis.

2.8 Contingent liabilities and contingent assets Contingent liabilities and contingent assets are not recognised in the statement of financial

position but are reported in the relevant notes. They may arise from uncertainty as to the

existence of a liability or asset or represent an asset or liability in respect of which the amount

cannot be reliably measured. Contingent assets are disclosed when settlement is probable but

not virtually certain and contingent liabilities are disclosed when settlement is greater than

remote. As of 30 June 2021, there are no contingent asset or liabilities.

2.9 Events after balance date The Financial Sector Reform (Hayne Royal Commission Response- Better Advice) Bill 2021

transferring FASEA functions to the Treasurer (supported by Treasury) is expected to be

passed by Parliament in late 2021, as a result operation will cease on the 31 December

2021 and the company will be wound up.

With the expiration of the funding agreement, $2.5m has been allocated in the budget to

Treasury to fund FASEA operations between 1 July 2021 to 31 December 2021 when FASEA

is wound up. The funding will be provided in quarterly instalments.

2.10 Member’s Guarantee FASEA is limited by guarantee.

35

2021 2020

Note 3: Revenue and Other Income

$ $

Contributions from Funders

3,900,000 3,900,000

Return of Contributors funds (1,330,042) -

Degree Assessment Fees

37,672 90,340

Interest Income

2,937 13,308

Government Relief COVID-19

- 135,585

Total revenue from operations

2,610,567 4,139,233

Note 4: Expenditure

Board related expenses

Board & Committee Fees

226,284 330,601

Board & Committee Travel Expenses

729 48,917

Superannuation

22,970 30,452

Total Board related expenses

249,983 409,970

Employee benefits and contractor

expense

Salaries & Wages

1,680,326 1,616,766

Redundancy Costs

581,646 -

Superannuation

140,755 145,415

Annual Leave

32,250 41,860

Consulting Staff

371,881 423,979

Total employee benefits

2,806,858 2,228,020

Occupancy expenses

Rent & Utilities

177,185 195,710

Insurance

7,509 8,491

Office Administration

166,859 142,398

Total occupancy expenses

351,553 346,599

Supplier expenses from ordinary activities

Stakeholder Communications

109,091 110,221

Staff Recruitment Fees

56,100 44,000

Bank Fees & Interest Charges

2,123 3,321

Legal & Accounting Fees

124,275 137,793

Travel and accommodation

3,084 59,858

Standard Maintenance

19,411 -

Standards Development & Implementation

293,989 537,096

Total supplier expenses

608,073 892,289

Note 5: Remuneration of Auditors

Audit of financial statements

33,000 35,000

No other services were provided by the Auditor-General during the reporting period.

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Note 6: Directors' Remuneration

2021 2020

$1 - $10,000

0 2

$10,000 - $20,000

1 1

$20,000 - $30,000

4 1

$30,000 - $40,000

1 3

$40,000 - $50,000

1 1

$60,000 - $70,000

1 1

$90,000 - $100,000

0 1

Total

8 10

2021 2020 $ $

Total remuneration received 264,759 351,861

Superannuation contributions amounting to $22,970 were paid on behalf of directors

(2020: $30,453) and are included in the total remuneration

Note 7: Key Management Remuneration

Short term benefits

708,343 365,297

Post-employment benefits (superannuation)

54,324 34,703

Termination benefits

291,301 -

Total remuneration

1,053,968 400,000

Key management personnel remuneration is the role of Chief Executive Officer, Chief

Operating Officer, and the Directors (disclosed in note 6). Note the role of Chief Operating

Officer was not included as key management personnel in the 30 June 2020 financial

statements.

Short term benefits include the movement in provision of annual leave for the CEO and COO

totaling $22,666.

Note 8: Cash and cash equivalents

Cash at bank and on hand

2,470,440 2,338,220

Note 9: Trade and other payables

Trade creditors

10,451 15,927

Accruals

378,070 143,900

Deferred income

- 711,398

PAYG payable

54,878 (5,024)

Payroll tax payable

15,810 7,298

Superannuation payable

9,303 12,928

468,512 886,427

Payables are all current and settlement is usually made within 30 days

37

2021 2020

Note 10: Employee Provisions $ $

Employee provisions - current

120,411 79,344

Employee provisions - redundancy 581,646 -

Employee provisions - non-current

- 8,816

702,057 88,160

Note 11: Cash Flow Statement Reconciliation

Operating profit/(loss)

(1,405,900) 262,355

(Increase)/decrease in other debtors and

prepayments

12,097 89,586

Increase/(decrease) in provision for employee

entitlements

613,896 41,859

Increase/(decrease) in trade creditor and accruals

1,623,526 (86,466)

Increase/(decrease) in revenue received in advance

(711,399) (52,499)

Net cash provided/(used) by operating activities

132,220 254,835

Note 12: Related parties

The company is an Australian Government controlled entity. Related parties to the company are

Directors, Key Management Personnel, the Minister, and other Australian Government entities.

No related party transactions outside of the compensation of Directors and Executive disclosed

in Note 6 and 7 occurred in the period.

38