The terms of reference state that the Quality of Advice review (QAR) will not make recommendations on the professional standards for financial advisers, which would include education standards.
There has been much debate in recent months surrounding education as currently, existing advisers with no degree must have an approved qualification by 1 January 2026.
It has been speculated that the advice sector could see a “mass exodus” if changes are not made.
Late last year, the government released the Education Standards for Financial Advisers policy paper which proposed a pathway coined the “experience pathway” that streamlines the minimum education requirements and recognises on-the-job experience for individuals with 10 or more years of full-time experience.
The Association of Financial Advisers (AFA) noted that this exclusion from the QAR’s terms of reference would mean education standards are “now entirely in the hands of the Minister”, however the industry body is hopeful the matter will be resolved soon.
“It is necessary for the scope of the review to be manageable, so we understand why some of these things have been excluded,” AFA general manager Phil Anderson told ifa.
“This means that issues like the financial adviser education standard and the Code of Ethics will need to be addressed by the Government, rather than being referred to the QAR for a recommendation.
“We look forward to an early outcome on these matters.”
Reaction to news that Michelle Levy of law firm Allens has been appointed reviewer has been mixed by industry; however, groups including the FPA and wealth giant AMP welcomed the news.
A report will be provided to the government by 16 December this year.
I really welcome this review. I have reviewed the terms of reference and believe that if some of this can be implemented some red tape can be cut.
I don’t believe education standards review is warranted, un jumbiling of various crossing legislations, potential letters of advice, use of record of advice in different circumstances can all be ways to help the industry
What does that mean in practise, I don’t know. Will it make advice more affordable? Probably not. Will it allow me to be happier and service a few additional clients? Probably yes . Does that help everyday Australians? Yes. It may give access to an Adviser for a one off letter or RoA
Quoted as saying[i] “groups including the FPA and wealth giant AMP welcomed the news.” [/i]….I’d be doing the opposite to what AMP says….surely there’s not that many AMP advisers left in the FPA is there?
so funny. good point.
This just proves that 1 single individual has way too much power. So if education standards are “now entirely in the hands of the Minister”, it begs the question whether Minister Jane Hume’s own education standard, qualifications and experience are suitable for her role as the Minister for Financial Services?
so funny.
If the QAR is “entirely in the Minister’s hands”, then, on past performance, we have a problem! Once again the review is headed up with a legal person so there MUST be liaison with financial advice bodies or leaders to establish what is practical and useful. The advice documents that are being produced currently contain so much information that is of little use to clients. Further, the onslaught of information they receive is overwhelming. I believe that documents need to be written to promote client understanding and provide clear advice solutions. The key reason for these documents is to explain to clients how to manage their investments. I believe that advice documents of the future need to make this the priority.
The reason advice documents contain useless information is yours or your licensee’s fault, not the legislators or ASIC’a fault. Advisers continually complain but have no idea what is required. They are like sheep – because someone else’s SoA is full of useless info you believe it is correct and follow their lead.
So what is correct Billy?
Read ASIC’s RG175 and ‘INFO 267’. If you are an adviser or a licensee you should have read them already. And please don’t come back with ‘oh but it’s all about what AFCA will say’. I challenge any adviser / licensee to show where AFCA has found against an adviser who had acted in the clients best interest. An SoA must be ‘clear and concise’. If the PARTICULAR client cannot understand it – that can be become an issue for AFCA. SoA templates are an adviser’s worst enemy.
I agree with Billy here
I sat on an SoA committee for a top 10 licensee and once the compliance people the lawyers were done with it the document ballooned to 95 pages
Asic bang on about clear and concise well that ain’t clear and concise
Not “ could be a mass exodus “…..there is a mass exodus already and it will turn into a
catastrophic exodus very shortly.
This industry has been discriminated against like no other for the last decade and the current destruction is the result….simple.
Yes but perhaps that is a good thing because only those who were willing to take the effort to study, will be left standing…stop say adviser departures are a problem…this was intentional.
The recent exodus is not however linked to education requirements, it is linked to financial planning being a terrible industry in which to work.
So people didnt get out instead of doing the exam? People havent made the decision to go now instead of being caught in the stampede at 2026?