The financial services industry has had to pay more than $200 million on education and training in the three years leading up to the implementation of the Financial Services Reform Act (FSRA), according to a new study.

Dr Victoria Wise of Victoria University undertook the research for the peak body for education and training in financial services, the Financial Services Education Agency Australia (FSEAA).

The data showed that on average each Australian financial services (AFS) licensee spent $30,000 on education and training in the three years prior to the adoption of the FSRA.

The study says the average cost of education and training for a licensee last year – when the FSRA was introduced – was a further $18,000 on average, taking the total transition costs to a combined $201.6 million for 4200 AFS licence holders in Australia.

FSEAA GM Deen Sanders says the data is preliminary and he is keen to see the results of more detailed analysis because “this does point to an enormous investment for industry”.

Mr Sanders says the FSEAA has been concerned that the impact of education costs has not been well understood in the FSR implementation. “This preliminary research on educational costs, especially when added to industry estimates of process and compliance costs, gives a worrying glimpse at the big picture of compliance cost.”

He says the most disappointing outcome is that the FSEAA’s industry research shows some of that education dollar was spent very badly, with a focus on meeting compliance deadlines rather than ensuring that the education contributed to the real change of behaviour consumers and regulators were hoping for.

The research also says the ongoing educational cost of staying current with AFS licence requirements will be about $25,000 a year. Mr Sanders says this equates to more than $100 million across the industry.