A number of industry groups have reacted to financial services minister Stephen Jones’ announcement this week that a consultation paper will be developed on education standards and the adviser exam.
On Wednesday (10 August), Mr Jones said the government would look at options to “streamline the education requirements for financial advisers” and addressed the 30 September deadline for existing advisers to pass the exam and continue to provide financial advice, saying that following the deadline, he will ask Treasury to explore how the exam can be improved, such as reducing the number of questions.
Speaking to ifa after the announcement, the Association of Financial Advisers (AFA) CEO Phil Anderson welcomed the news saying he is pleased that the government is looking at how to better recognise prior learning and experience and how additional pathways can be made available for new industry entrants.
“We welcome the government’s recognition of the important fact that the industry believes that the Code of Ethics can be sensibly modified to remove obstacles to the provision of financial advice. We anticipate that this exercise will be informed by the Quality of Advice Review and we welcome the consultation that will take place next year,” Mr Anderson said.
“There are a large number of advisers who are very anxious, having sat the financial adviser exam in recent weeks and awaiting their results. The minister has been clear in his media release that the deadline for passing the exam remains 30 September 2022, and impacted advisers will need to plan on this basis.”
Meanwhile, the Association of Independently Owned Financial Professionals’ (AIOFP) executive director Peter Johnston also welcomed the news, however added that the industry group is “naturally disappointed” that Mr Jones did not defer the exam until after the 1 October “cliff” date to restructure it.
“We were hoping for a 12-month deferral of the exam, a removal of the ambiguous ethics content and inclusion of questions around competency of their advice specialty,” Mr Johnston told ifa.
“To be fair, the minister did not specifically promise any exam changes, but we will however continue with our lobbying activities until October 1st in hope of a change of mind.”
It comes after ASIC confirmed that the results of the latest exam sittings will be made available in the first week of September, which will give advisers who failed the exam less than four weeks to decide on their next course of action.
Mr Johnston said that the AIOFP is urging those waiting to “commence these preparations”.
“We are requesting that anyone buying practices over the next six weeks to be compassionate and fair with the terms and conditions, in many cases this will be a person’s lifetime work and needs to be treated with respect,” he said.
“We have already had enough mental health problems, stress and suicides over recent years and want no more. It will be a good time to check on those who fail the exam to see how they are coping once the results are out.”
The Financial Planning Association of Australia (FPA) CEO Sarah Abood — who previously stated that addressing the education standards should be the “first order of business” for Mr Jones — said the association is looking forward to participating in the consultation “to ensure the continuing professionalisation of financial advice”.
“Financial planners currently face considerable uncertainty regarding future professional standards, and many have paused or postponed studies until the outcome is known. Hence we believe the resolution of this matter is of the highest priority,” Ms Abood said following Mr Jones’ announcement.
“We encourage the government to ensure the consultation process is targeted and efficient, and we are keen to see swift and decisive action by the Minister giving the profession certainty on these standards.”
In the lead up to May’s federal election, Mr Jones said Labor would not require advisers with 10 years of experience and an “unblemished record” to complete a university degree to practice.
Currently, existing advisers with no degree must have an approved qualification by 1 January 2026.
On a special Momentum Media podcast recorded prior to the federal election, Mr Jones outlined his plans to address the education standards.
“… there’ll be a bunch of people who’ve been providing excellent advice for decades that we don’t want to tip them out of the industry at exactly the time when we need them,” he said.
“We need them as mentors, we need them as service providers, we need them as trainers, we need them in the industry.”
Perhaps we need to lobby for all politicians to have an economics degree, pass an ethics exam set by us plus have at least five years experience in running their own small business, That should bowl most of them out.
Call me cynical, every time i think i have done what i need to do to qualify they keep moving the goal post. Having done an ethics subject 3 times already and now needing to do ethics and another bridging subject after 23 years in the industry is stupid. I have kept up my CPD points each year, specialised in SMSF and estate planning and still not enough. Seriously jump through all the hoops you want but if you seriously think there won’t be another FASEA exam or other degree to do in future then you are kidding yourself. This industry is just such an easy target by the media and the politicians we will never win. Look at what happened with Melissa Caddick. At 54 sold my business and i am out. May do the extra subjects just in case in future want to do something but not sure i really want to spend the time and money. The general public are the biggest loser in this debacle as they really can not afford to now pay for the advice and do not know who to trust.
Mr Jones said, “We need them as mentors, we need them as service providers, we need them as trainers, we need them in the industry.”
Makes me wonder what would have been if Scomo and Josh Frydenscum@Goldman’s would have lost the previous election to this last one?????
The Government has no clue. Making it mandatory for financial advisers to complete an ethics course and adapt to higher professional standards is a joke. Nothing short of criminal the way you are being treated. You’re the accomplished and quintessential professional.
We have known about the rules for years. Anyone who hasn’t committed shouldn’t be practicing. Let’s move on and stop whinging.
Has there ever been any indication red tape will be wound back and we’ll be regulated by a board of our peers if we meet this education standard?
From what I see there is a whole bunch of posters who talk about ‘becoming a profession’ but there has never been a promise anywhere that if we reach a certain point we will be able to run ourselves like Accountants, Lawyers or Doctors.
I think as an industry we’re being sold a ‘if you’re really good Santa will bring you a present’ promise by the government and industry bodies but we’ll just end up being squeezed until our heads pop.
When do we start asking, ‘ok, done that, now what’s in it for me?’ Because as someone who has met all the requirements I have got zero benefit out of all of this, show me when we’re going to be a self regulating profession instead of lying to me about some pie in the sky ideal.
Michelle Levey has already stated that a principles based regulation should be in place. This is our Code of Conduct we have had to write an exam on and complete the more advanced bridging course. When the wider community trust us as professionals and accept our knowledge as an ‘industry’, thats when we can say we are a profession. From this point there is justification for us to be trusted to self regulate. Whining about qualifications and wanting carve outs just takes us further away from getting to self regulate based on principles in the code. Until then we can continue being confused and persecuted by the 1000’s of pages were expected to be aware of, read and understand and then apply….even when these may be contradictory!
For many of the older qualified advisers who are already following all the principles of a professional, we may never benefit from, or see the industry get the self regulation opportunity we want to see. But we are on board as we know that the professional we love needs to be widely recognised as a profession if its to survive and return stronger to help everyday Australians with their finances. This will benefit the younger qualified advisers. The longer we delay, the higher the attrition rate, the greater the scope for more Melissa Caddick’s to besmirch our profession. It has to be done properly this time. We’ve had calamity in the investment markets due to covid, inflation, and the war. People are seeing our value because they are engaging with us or wanting to. We have to make use of this opportunity. We’re simply running out of chances.
I would appreciate my fellow advisers “respectful” opinions about my unique dilemma in the current scheme of things:-
– 60 years old and would like to continue serving my clients another 5 – 10 years
– 43 years Banking & Finance & Mortgage Broking experience
– 13 Years Financial Advisory Experience
– Passed FASEA Exam
– Zero breaches or clients complaints
– Bachelor of Business Degrees (Accounting & Commercial Law)
– Diploma of Financial Planning
– Diploma of Finance
I have been advised I must complete 4 units of study to remain licenced beyond 31/12/25 (3yrs 4 mths away).
If you were “The Regulators” and given my background (above), would you say I am qualified sufficiently to practice on until I retire, or would you insist I complete another 4 units of study or else be put out to pasture 31/12/25?
Sadly you will need to do the extra 4 units of study or at a minimum the ‘ethics and professionalism’ course. In order to limit yourself to just one of the extra masters level subjects you could consider doing two of the following: F(ch)Fp through the AFA. CFP through FPA, Advanced Diploma Financial Services or SMSF accreditation through the SMSF org.
Do I feel you are qualified by experience? Definitely. Do you meet the professional standards so that as a participant we can be treated and seen as professionals…not quite.
I benefitted from doing all these courses…I turn 60 next year.
Your’e OK in my book (provided you do the Ethics course) because its exactly your experience and recogntion of prior learning that Minister Jones accepts. You’ll likely be grandfathered for 10 years (to complete the 4 units) or you retire at the 10 year juncture. Thats my take on it.
I don’t deny you must be questioning the requirements. But the industry is bigger than one person and to gain, or is it regain, the confidence of the public, the government and the media we need to have consistency across the industry.
I am over 61 and have met all the qualifications, over 35 years planning experience. What you haven’t said is how old your degrees are.
Either way as per Has Shoes, you are not quite there yet.
Best of luck as you should breeze it in and be one of the professional that aspiring planners can look up too.
This is why I voted for Labor. Look at what the “liberals” did to this industry. Flushed it down the toilet.
No problem at all – carry on. Some it seems are quite convinced that becoming a “profession” will gain respect with Treasury etc and I guess they believe Financial Planners will then be allowed to have reduced regulation and be in a position to deliver affordable Financial Advice to the Mum and Dad’s of Australia – and their Superannuation. If only that was true.
More likely I suspect is Advice delivered by Large Product Providers via affordable and targeted product advice as the member requires will be increased and expanded.
If you don’t agree – have a read of the submission to the RC from Treasury – very clear on their intentions I believe – Financial Planner’s it seems are unethical it seems as we tend to recommend retail products over Not For Profit Product (underperform vs high performance), we tend to recommend retail products over Not For Profit (expensive vs cheaper) and Financial Planner tend to recommend retail vs Not For Profit (pay commissions vs don’t pay commissions to Advisers) due to being paid conflicted remuneration – all leads to the conclusion that Financial Planners lack Ethics – hence Ethics Courses and FASEA or what I like to call it – the Communist Re-Education Camp.
Prediction – more “Advice” will be delivered by people other than Qualified Financial Planners – and those left will need to service a much smaller number of clients – the Mum’s and Dad’s and associated FUM has left the building – and in my opinion is the real Elephant in the room – not your qualifications.
Based on the qualifications listed I am very surprised you would need 4 units of study. The FASEA education policy is relevant degree plus DFP or ADFS only needs to do the ethics unit.
I suggest you double check how the policy applies to your situation. If the person who “advised” that you need 4 units was a dealer group compliance officer, remember those people have very little real understanding of the law, they double everything to protect the licensee, then double it again to protect their own arse.
I’m in the same situation. It’s the four units plus ethics he will have to do. Pointless and money making for the education providers, yes. But that is the requirement with Rules as Written as of today. Hopefully they get changed.
If the study was actually beneficial, I’d actually be on board, but as evidenced by people that have done the study and want refunds etc if the standards are relaxed, clearly not many see any value in the extra study. I’m always keen to do study (and do it) in area’s that add to my expertise, but do not see the benefit in study in areas already experienced or that I outsource to other experts. That’s merely a waste of time and money.
Absolutely, that should be enough. I can’t agree more.
To be fair you have had many years to do these subjects not just 3 yrs 4 mths as you say.
But even 3 yrs 4 mths is long enough. just bite the bullet and get started.
I have similar background to you but have 22 years FP experience
Just do it. It’s like ripping off the band-aide. Same boat, more qualification + 20 plus years of experience….did the study ( i mean work) the assignments took about a day, probably lost about two weeks over 18 months, on reading the material, assignment and exam and got a masters. Once subject didn’t read the material, and the majority I just read the headings. Let’s remember this is not about us it’s just so we can keep some Bank CEO’s out of jail.
Let’s just go back to a 2 week course.
And real estate agents and used car sales people get an exemption on that.
Bit of a strawman argument from what is being discussed here. No one is saying that new entrants standards should not be increased and I believe most are on board with the professional year (I certainly spent the equivalent of that when I entered the industry as most licensees required new entrants to work with existing advisers and be supervised to some degree even back in the early 2000’s).
What is being argued is that people that have been operating in the industry for over 10 years without issue have that experience recognized. You can read all the books in the world and pass all the exams you want, but that does not teach the same skills as actually doing.
Lets also face it. The technical and ethical courses that would make someone compliant even under the new education standards are sorely lacking in teaching the skills one needs to actually be a good client facing adviser.
If they change the rules, can they refund me for the 8 subjects I have paid for, and those of my advice team our business has also funded.
This is absolute bull dust, we have all had plenty of time to do what is required, and if u have left it till now, it should be too late.,
One would assume from that response that you agree there is absolutely no value in the subjects beyond a compliance requirement. Why then, would you want to push that requirement onto others?
If you have not yet passed the FASEA examination then you should not be advising the public. That is self evident.
What if the person delivering the advice is an employee of a Large Product Provider and delivering advice on the in-house product only?
How many more deferrals do we need Peter Johnston? We have had so long already….I’ve been in the industry for 30 years, sat the third FASEA exam and passed and had to complete 8 subjects…done….and I truly believe the industry is better for all of this….I’m a dinosaur but I’m not extinct!
You are the type of person the industry, and the public, needs.
I just don’t understand, nor respect, the advisers who haven’t simply got on with the job and are foolishly waiting for the next grandfathering clause.
Well said. It is time to get on with making the industry a profession. This involves increasing education and showing that we understand the ethics standards our clients expect of us. The delays and potential for changes (never promised) are causing the stress. Just do it
Funny how Jones said if Labor get in he will change the education requirements and it shouldn’t take long or be a problem to do.
Now its a consultation process which is code for we just wanted to get elected and will blame that process for not doing what we said pre-election.
Plenty of posters said not to trust Labor.
Will those who did extra study be reimbursed their tuition fees if it’s no longer needed? Just pick a strategy and stick to it!
If the Government does a backflip, then a class action should be started to compensate advisers like myself who spent over $15k + lost revenue
YES! I’m sure there would be many advisers wanting to get in on that class action. Leave the education requirements as they are or compensate advisers the thousands for fees paid for courses not needed, an hourly rate for the unnecessary time spent on those courses and most importantly, a large sum for mental distress (while a minority of advisers sat around doing nothing waiting for the rules to change).
Plus time taken from work, plus time taken from family
Getting a bit sick of advisers moaning about having to pass FASEA this year. You have had 2 years to pass the exam and if you haven’t done so you should not be advising anyone about how to manage their financial affairs
Absolutely right! And the industry groups fighting against the needed requirements, just to maintain membership numbers, need to show respect for the industry, and public, and tell those advisers who are refusing to do the exam or aren’t able to pass to leave the industry. Lobbying for something that is wrong degrades their “industry association” status.
Actually it has been more than 3 years since the first exam sitting.
Jones fiddles while Rome burns…