The 1 January 2026 education deadline is set to compound the issues plaguing the financial advice sector, according to Association of Independently Owned Financial Professionals (AIOFP) executive director Peter Johnston.
“With no new advisers expected to join the profession [for very obvious reasons], up to 4,000 eliminated over education confusion, and the deregistration of those who don’t give advice to avoid the CSLR levy, this scenario may incite a ‘rush to the door’ to avoid CSLR liabilities getting out of control,” Johnston said in a letter sent to federal MPs.
“An ‘Armageddon’ scenario is quite possible for the profession during 2026.”
According to the AIOFP, the education deadline could wipe out somewhere between 2,000 and 4,000 financial advisers, given the ASIC warning from June that more than 4,600 advisers were yet to meet the qualifications standards.
Additionally, an AIOFP survey of its members found that around 30 per cent would leave advice in early 2026 if the Compensation Scheme of Last Resort (CSLR) remains in its current form.
This would lead to a considerably higher number of advisers leaving than the Financial Advice Association Australia’s (FAAA) recent estimate of around 1,000.
“At the moment, the number that don’t qualify for either pathway look unreasonably high – over 4,000 – and we don’t think that’s the reality,” FAAA chief executive Sarah Abood said on a webinar last month.
“Our estimates are that around 1,000 advisers might be leaving at the end of this year. That’s based partly on data and partly on intention surveys that various providers have done. It’s a guess but it will be a decent dip at the end of this year.”
Whatever the number eventually lands on, Johnston has requested that the MPs push for a 12-month delay for the deadline to 1 January 2027 and an “ASIC-led intensive online education program established for current and prospective advisers attendance to understand the circumstances”.
However, there are just 15 parliamentary sitting days left in 2025, leaving little time for government intervention on either the education deadline or changing the structure of the CSLR.
On this front, the AIOFP wants the CSLR legislation to be “realigned with the original recommendations of the Ramsay review and commissioner [Kenneth] Hayne where the levy funding is spread across all financial services industry stakeholders not just financial advisers”.
“If these other stakeholders are held to account for their behaviour with levy participation they will more than likely adjust their conduct, a great outcome for consumer protection and the industry in general,” Johnston said.
“We suggest at least the other five stakeholders are included in the levy payments – trustees, custodians, research houses, platform administration services and auditors, we also suggest an annual levy fee across the entire funds management industry is implemented to protect consumers.”
Last week, Johnston called for a royal commission into ASIC and the managed investment scheme process, arguing that the long-standing focus on financial advisers as scapegoats has allowed other stakeholders – including ASIC, APRA, trustees, custodians, auditors, research houses, and institutions – to evade responsibility.
“For the last 30 years MIS has protected ASIC from litigation with their ongoing flawed conduct but it has thrown taxpayers ‘under the bus’ with consumer protection,” Johnston said.
“ASIC/APRA, trustees, custodians, auditors, research houses and institutions have evaded accountability with their role when financial products fail, they have cleverly, unfairly and most times collectively spun the blame onto financial advisers whilst slithering away for legal cover.”
He added: “It is time to drain the Canberra bureaucratic swamp with a royal commission to protect consumers.”
It’s 2025 and frankly if you can’t muster up the gumption to cop a bit of education sweet to keep your job then move on.
Plain and simple.
Thank you AIOFP. They really do want to help advisers.
I’m a big advocate of the AIOFP but i think they have misread the room here. Whilst i don’t agree with the educaiton requirements for pure risk advisers, i agree with other commentators in that all advisers have had ample time.
I think the comments in here are pretty telling Peter.
Might want to re-visit this article.
https://www.ifa.com.au/news/30546-aiofp-hits-out-at-elitist-younger-advisers-for-dismissing-labor-s-plan
As an elitist younger adviser, we cannot continue to be held back by kicking cans down the road time and time again. There’s been plenty of time.
That said, I 100% agree with the need for there to be a Royal Commission into regulators and other agencies that are doing (in my opinion) a terrible job.
A lot of people are reading far too much into the FAR data. FAR is currently very unreliable due to:
– Info about advisers’ education status, or their use of the experience exemption, has not been updated for many advisers yet. There is no compelling need for advisers to get this info updated prior to the end of this year. There is a requirement for licensees to update FAR within 30 days of being formally notified of changes by the adviser, but there is no regulatory requirement for advisers to formally notify their licensee ahead of time. It’s also much more cost and administratively efficient for licensees to batch up the changes and do them as close to the deadline as possible, when no further changes are likely. (ASIC actually charges licensees for the privilege of updating ASIC’s records.) Many licensees prefer their advisers to give them an indication of progress and likely status, but not to provide formal notifications until late in the year.
– Quite a few FAR registrants have never been active advisers and never will be. They are paraplanners, CSOs, BDMs, compliance officers etc who got put on the register prior to the new entrant rules coming into force, “just in case”. They will drop off the register in Jan 2026 because they don’t meet the experience exemption or the new education requirements. The majority of the 1,000 or so FAR losses at that time will come from this category. There will be very few losses of actual practising advisers.
Regardless of FAR unreliability, none of the education stuff has anything to do with CSLR. Peter Johnston is conflating issues and making himself look silly.
Let’s start by draining our own swamp (of lazy advisers).
I agree that the Adviser Degree / Graduate Diploma should have been well and truly done by year end.
Is everyone aware of the Additional Tax Financial Adviser / TPB / now ASIC extra education requirements also 1/1/26 ?
Now this one is dubious given the Adviser study upskill, exam, ethics course, etc.
Good old Grandfathering memberships – if you were directly registered with the Tax Practitioners Board (TPB) as a Tax Financial Adviser pre 2021 then you are grandfathered under ASIC.
But a lot of Advisers were sub registered via a single main TPB adviser rego and over seen like an AFSL for being a Tax Financial Adviser.
They now need more specialist Tax and Law courses to remain Tax Financial Advisers
While it’s unfortunate that many advisers may exit the industry, they’ve had ample time to upskill. As we try to push financial advice into a true profession, we can’t continue offering concessions to those who choose to remain at the Diploma of Financial Planning level.
Totally agree. Since the first deadline we have had 2 or 3 extensions…enough is enough.
But the “New Class of Adviser” is OK?
No more extensions please!!!
We have all known about these changes for many years now. I upskilled very early because I felt that we needed to move to a profession.
Let’s move on and promote our profession as a profession….
No way they will extend the education time line, there has been plenty of notice. If you haven’t met your requirements it’s poor planning on the adviser.
Let’s focus on fixing CSLR. Including the 5 stakeholders is a good start. Remove the but for approach. Make it a real last resort, e.g wait for first guardian / shield to be fully wound up and chase the directors for every cent to see where the dust settles before good advisers and businesses start paying for their fraud
Advisers have had years to get this right. There is no excuse not to be qualified by the end of the year.
At what point does the industry and those advisers on the gauntlet need to accept responsibility here? Each has had years to put this risk to bed and now all the wise old owls of industry can do is “beg” for ammendment.
Grow up.
Fed up with the excuses. We were all given adequate notice, regardless of whether or not we agreed with the new requirements. Good riddance to the lazy “advisers”… don’t spoil it for the rest of us.