With the 1 January 2026 deadline for relevant providers to meet the qualifications standard rapidly approaching, fears are mounting that it could see a considerable exodus of advisers.
In a letter to Financial Services Minister Daniel Mulino, seen by ifa, the Association of Independently Owned Financial Professionals (AIOFP) has warned of an “inconsistency in the requirements for current professional financial advisers to complete a formal and accredited course of study in ethics”.
Earlier this month, ASIC released the results of a second spot check of the Financial Advisers Register (FAR) that found thousands of advisers don’t meet the requirements to remain registered after 1 January.
It was discovered that AFS licensees have notified ASIC that 6,426 relevant providers of the total 15,610 registered on the FAR hold an approved degree or qualification, as of 28 May 2025. Meanwhile, an additional 4,580 are relying on the experienced provider pathway.
This leaves a remaining total of 4,604 relevant providers who are yet to meet the qualifications standard, the regulator highlighted. Of this cohort, 1,844 may be eligible for the experienced provider pathway, but their AFS licensees are yet to notify ASIC of that information.
Lionel Rodrigues, chair of the AIOFP technical committee, said the inconsistency arises “because a suitably experienced adviser, who has availed themselves of the EPP is not required to complete a formal course of study in ethics”.
“Under Treasury Laws Amendment (2023 Measures No.3) Act, passing on 20 September 2023, the emphasis was on experience and having no disciplinary action recorded against that adviser on the Financial Adviser Register (FAR),” Rodrigues said.
“There was a requirement to complete the national exam, however, the requirement to undertake a formal course of study in ethics was specifically excluded by the minister.
“This contrasts with an adviser who, whilst not progressing through the EPP, and having met all of the other formal qualifying education requirements, must still successfully complete an accredited ethics course of study.”
He also noted that financial advisers have been subject to requirements on formal continuing professional development (CPD) and a national exam since 2017, along with the statutory and enforceable Code of Ethics since 2019.
“I respectfully alert the minister to the fact that since 2017, financial advisers have been required to meet statutory educational and ethical standards,” Rodrigues said.
“This situation pre-dated the legislated innovations of the 2023 Experienced Provider Pathway. Furthermore, financial advisers, since 2017, have CPD requirements of 45 hours per annum, of which nine hours must compulsorily include Ethics training.”
Given the significant drop in the number of financial advisers from almost 29,000 in 2018 to less than 15,500 currently, the possibility of another mass exodus would be a blow to the profession.
“The anecdotal evidence suggests that by 1 January 2026, the numbers of advisers may fall by between 2,000 to 4,000,” Rodrigues added.
“Despite the legislative imperative, some confusion exists amongst advisers as to the formal educational requirement of completing an accredited Ethics qualification.
“Understandably this confusion arises as a consequence of the implementation of the EPP in 2023. It is also understandable that financial advisers are concerned, that having met all of the ethics CPD requirements since 2017 and completing relevant tertiary studies, they must finalise a formal ethics qualification by 1 January 2026.”
He added: “Currently, the demand for quality advice is increasing as adviser numbers remain static with a potential for substantial decline post 1 January 2026.”
To “remove the inconsistency”, the AIOFP has urged Minister Mulino to exercise his “ministerial discretion” to remove the requirement to complete a formal tertiary ethics course for all professional financial advisers registered on the FAR.
This was a sh*t and completely irrelevant course, but it is what it is. Just get it done. I decided if I was going to have to study that I would do this course as part of my Masters so I wasn’t doing for nothing.
Seriously they have had years to complete the formal ethics qualification and have basically been slack not getting themselves up to speed as many others have done.
I am confused as to what the AIOFP are calling for this time. The ethics unit is not required for anyone who is eligible for the Experienced Adviser Pathway. It is required for everyone completing the Education pathway. If you removed it, then they would simply need to do another course instead. What does that achieve?
Their grasp on the facts is shocking. It is 40 hours of CPD, not 45. The new education standard and the CPD obligation started in 2019, not 2017. The Code of Ethics came into force from 1 January 2020, not 2019. The exam started in the middle of 2019, not in 2017.
It seems they want to be seen to have something to say, rather than have properly researched the issue and have a point of substance to make.
Are you sure ?
The legislation provides for 40 hours of CPD, with the exception that if your status is a ” Tax Financial Adviser”, a further 5 hours of CPD is required.
Who’s not doing the research just to have something to say ?
Tax Financial Adviser extra study also due 1/1/26.
Specialist Uni courses in Tax and Law required to be / remain a Tax Financial Adviser.
Except those that were registered with TPB pre 2021 (or some date like that).
As lead Adviser, I was registered with TPB as Tax Financial Adviser, so I am good.
But under TPB I could also oversea up to 20 other Advisers in our AFSL (don’t have that many) as Tax Financial Advisers under my TPB registration.
Now ASIC / FARSEA have replaced TPB for Tax Financial Advisers, those Advisers under my old TPB sub Authority are stuffed and need further specialist Tax & Law course to remain registered Tax Financial Advisers.
Another FARSEA debacle due in 6 mths that many don’t seem to know about and get no publicity.
The legislation provides for 40 hours of CPD, with the exception that if your status is a ” Tax Financial Adviser”, a further 5 hours of CPD is required. The additional 5 hours is specifically CPD hours in tax related matters. Please see ASIC INFO 268. Total hours required to provide all services an adviser is 45 hours.
Just because you have a university degree dosen’t mean you are ethical even if the degree is about ethics.
And for those Advisers that did the $3,500 & 120 hr Ethics Course that is no longer required via the EPP.
From a time cost point of view of 120 hrs at $440 / hr = $52,800 + $3,500 = $56,300 completely wasted.
Besides the waste of time and time value, the sheer gall of Canberra Pollies and Bureaucrats forcing Advisers to do a 120 hr Ethics course is hard to take.
As for the newer 40 hrs CPD with 9 hrs Ethics pa for Advisers.
Canberra Pollies and Bureaucrats, many of whom are Lawyers grant Lawyers a lowly 10 hrs CPA pa and only a single 1 hr Ethics CPA pa.
I bet the Pollies & Bureaucrats don’t even need to do CPD for their actual jobs ?
HAD A GUTFUL OF CANBERRA MORONIC POLLIES AND BUREAUCRATS.
The only thing these Canberra morons manufacture = MORE FREAKING RED TAPE.
The number of regulatory restrictions in federal law has increased by 88% since 2005 !!!
And these Canberra morons wonder why Productivity has stopped for the last 15 years.
ITS THE EVER GROWING FREAKING RED TAPE MORONS !!!!!!!!!!!!!!!
Adviser numbers will fall by no more than a few hundred come Jan 2026.
Many advisers have completed studies, many are still completing studies in time for January, and many will qualify via the experience pathway. NONE of them have any legal obligation to inform their licensee of their status prior to Dec 2025, so it’s pointless trying to read too much into the FAR before then.
The only ones who will drop off come Jan 2026 are those who don’t qualify for the experience exemption, and haven’t bothered to complete the study requirements by then. No more than a few hundred.
Politicians should be required to complete an ethics course within 1 year of being elected in their first term, and at their own expense. If they do not so, they should then be thrown out of parliament.
Admittedly, we would have a lot of by-elections.
If you have a similar university degree, the extra 3 years of study, versus a diploma that is likely a couple of months study, plus the extra scrutiny on exam conditions, plus the extra group assignments and class participation, this should be recognized for a higher standard of ethics. Revoke the formal course of study in ethics requirement, respect the years spent at university to be a professional in your industry.
Who else is fed-up with this charade?
I wonder how many advisers are incorrectly thinking they are required to complete an extra 5 hours CPD that they weren’t aware of as a result of reading this article?
The Ethics unit is a waste of time and resources IMO.
But removing the requirement at the last minute is not a solution. We’ve all had plenty of time to complete this unit and most have spent the time and money to meet their obligation.
If necessary, a 6 or 12 month extension and written warning to those who have not yet completed it would be more practical.
They still have 6 mths to complete Ethics course, doesn’t take that long.9
I have a relevant degree and also meet the experience pathway. No chance I am paying to do the ethics degree on top of this. Has been a money grab from the start. No surprise in this industry, hands out everywhere you look.
So your plan is to exit the industry on the 1st of Jan?
It’s only one subject
No. I meet the experience pathway, so having the degree and needing to do the ethics course is now irrelevant to me.
If you meet the experience pathway you don’t need the ethics module. If you dont meet EPP but have a relevant degree, you still must do the ethics unit. That was the point of the article.
Yep exactly, as I meet the experienced pathway that’s what I would take and avoid the course cost Ana massive time costs for the rubbish ethics course.
However, as the rules were strict myself and our other advisers decided to do the Ethics course as study towards the Adviser exam that was then again 1/3 Ethics. So with a relevant degree, DipFP, SSA, etc plus Ethics, now qualified both education and experience paths.
FARSEA debacle, still getting more stupid should be a compulsory bureaucratic study course, plus the Ethics course, plus 40hrs CPD pa with 9 hrs Ethics CPD pa.
I have two degrees and meet the experience pathway. I am wasting $1,950 to complete an ethics course that I don’t believe will teach me much because I have learnt through this experience not to assume anything will go smoothly for the advisers. If there is a way to screw the financial adviser it will be found.
What a mess.
Don’t forget there are thousands of public accountants with strict ethical and professional standards that have clients asking them to provide financial advice on their super and wealth creation but are held by this red tape. Allow suitably qualified accountants to provide much needed financial advice.
you must be kidding? Only Harvard trained elite FP’s can be trusted!
Kaplan is similar to Harvard 🙂
Accountants’ ethical and professional standards are enforced with a wet lettuce leaf. Hardly strict. Accountants routinely break the law in relation to investment advice, and in relation to SMSFs that generate conflicted revenue for the accountant but are entirely unnecessary for the client. Too many consumers are already receiving bad advice from accountants. That should be curtailed, not expanded.
They can provide financial advice provided they have the correct qualifications and follow the compliance requirements. This whole “accountants can’t give advice and they are trustworthy” is utter rubbish.
Although I agree that the requirement to complete the additional ethics module feels excessive, the fact remains that the rules have been clearly established and in place since they were first announced.
If the Minister were to remove this requirement now, it raises a serious question: what about those of us who have already complied in good faith? Many advisers have completed the module at their own expense, both financially, through course fees, and in terms of time that could have otherwise been spent with their families or servicing clients.
Removing the requirement retrospectively would be unfair to those who followed the legislation and upheld their obligations as required.
How do you feel about the new class of advisers being pushed?
But by introducing the experience pathway they already did that albeit at an even more extreme level.
Fairness is not in the governments vocabulary.