In an exclusive interview with ifa, Minister for Financial Services Stephen Jones said the experience pathway is a “pragmatic solution” to a “real problem”.
“To the people who went out and got their qualifications, that’s fantastic. They’re serving their clients well, and nobody went backwards because they had too much education in my view. I think they’ll be better advisers because they’ve put that investment into themselves and their businesses,” Mr Jones said.
“I had a real problem that I had to deal with, and I looked for a pragmatic solution. It’s transitional. It’s not going to be an ongoing provision. So, if you’ve met the test, you’re in. Ten years unblemished, you’re in. And there was a whole bunch of those people who were probably mentoring graduates themselves. So, if they were duds at their job, they’ve probably gone broke by now.”
The minister stressed that he is “totally on board with the professionalisation of the industry”, which, he noted, requires an “acknowledged qualification framework”.
He also told ifa that he is “keen” to, together with the industry, explore how to ensure that the qualifications framework maps the real-world experience of those moving into university study.
“We’ve got a problem here to solve. Let’s work together on it,” the minister said.
He believes that a pathway into advice for those studying across other areas of financial services could be key to lifting new entrant numbers.
“People, when they’re leaving school and thinking what university degree they’re going to do, don’t think, ‘Oh, I want to be a financial adviser’. They think, ‘Oh, I’m interested in commerce or I might want to be an accountant, I’m interested in the law, corporations or business’, all that sort of stuff. That’s the degree that they find themselves going towards,” Mr Jones said.
“Having a pathway that enables somebody who might have studied accountancy but at the end of the day, discovered that they were more interested in the people side of the business than the planning and the strategy, and thought financial planning is absolutely for them. How can we get them to connect their very relevant accounting qualifications with a post-degree qualification? That’s necessary,” the minister continued.
In early September, Parliament enacted the experience pathway legislation, which qualifies an adviser as having satisfied the educational prerequisites if they have 10 years’ (cumulative) experience providing advice between 1 January 2007 and 31 December 2021, along with an unblemished record.
The announcement of the pathway’s approval elicited a mixed response within the industry, with both joy and dismay creating a relatively even divide.
Mr Jones had earlier announced that he would turn his attention to a new entrant pathway in the back half of 2023 – a pathway that has been in discussion since 2021.
Namely, the new adviser pathway and the experienced adviser pathway have been closely linked since the previous Liberal federal government issued a consultation in December 2021.
But while both the previous government and the current Labor government have consulted on the pathway, there’s been no meaningful movement on the new entrant front.
According to Wealth Data, as at 6 October, there were 15,692 advisers in the industry.
To watch our full interview with Minister Jones, click here.
This interview is very revealing. Seems like the minister was damned either way, in direct proportion to the advisers for an against the “experience” pathway.
Interestingly, since getting my recent Masters, I’ve been flooded with offers and finally, I have the leverage to negotiate a golden parachute (I’m age 63).
I think the best outcome for the future of the profession has eventuated. Thanks Steven. My recent research found a high likelyhood that those that didnt meet the criteria? Ate already well educated, some holding multiple degrees across finance, accounting or some other business discipline.
The elephant in the room is the unique red tape discrimination against retail advisers, that favours super fund advisers who never have to seek fee consent from fund members for their ongoing salaries. When the Annual Fee Renewal Consent Forms (that does not exist in any other jurisdiction on earth) are changed to a one-off consent form for moderate ongoing support fees, retail advisers will then have some time to do extra study above the 40 to 80 hours of CPE we already do. Until this ridiculous & punitive red tape is removed, that investors living busy lives also find annoying, advice service support will continue to fall for millions of Australians.