In its submission to the Australian Bureau of Statistics’ (ABS) fourth round of consultation on the Australian and New Zealand Standard Classification of Occupations (ANZSCO), the Financial Advice Association Australia (FAAA) said there is a “critical need for the ANZSCO to be consistent with the legislated education requirements for financial advisers”.
Under the proposed updates to the ANZSCO, financial advisers are recognised as a skill level 1 occupation, which requires a “bachelor degree, higher qualification, or at least five years of relevant experience”.
The final part of the description is what caught the FAAA’s attention, noting that it is incorrect as it does not reflect s921B of the Corporations Act and “should be removed”.
“We are aware that education providers use the ANZSCO occupations to promote their courses to prospective students, particularly international students,” the FAAA said.
“It is essential that such individuals are aware of the strict legal requirements they must meet to fulfil the occupation of financial adviser. Incorrect skill requirements on the ANZSCO could result in a person who relies on this information not meeting the legislated requirements to practice.”
The association has also requested an update to the classification of the paraplanner occupation.
While financial adviser falls within the broader major group level of professionals within ANZSCO, paraplanner is under clerical and administrative workers.
This, the FAAA argued, creates a “disconnect between the occupation classifications” that is concerning as “paraplanning is often used as a career pathway to becoming a financial adviser”.
“This disconnect also increases the risk that users of the ANZSCO may not be aware of the existence of the new Paraplanner (531932) occupation, and it’s relationship with the occupation of Financial Adviser (212131), which may impact the quality of the data collected,” the FAAA added.
“It would be helpful to include at the bottom of the classification – ‘related occupations’ with a link between each related occupation.”
Updating financial adviser occupations
While the education requirements and paraplanning classification drew criticism from the FAAA, it was much more supportive of the proposed changes to the financial adviser occupation names.
Under the current structure, the ANZSCO refers to financial investment adviser, with the alternative title financial planning adviser, and financial investment manager, with the alternative title portfolio manager.
“These occupation names, titles and associated skills included in the current ANZSCO, do not reflect provisions in the Corporations Act or current roles and practices in the financial services industry. This classification mixes up unrelated roles across different parts of the financial services industry,” the FAAA submission explained, adding that the terms for providers of personal advice are protected by law.
The update to add financial advisers as a new unit group along with the financial adviser occupation “more accurately differentiates the occupation of financial adviser to reflect the skill and education requirements placed on these professionals by the Corporations Act, and the tasks they perform”.
“This will positively impact all users of the ANZSCO as it will align with the legal definition and education requirements for financial advisers,” the FAAA said.
The submission also noted that education providers rely on the ANZSCO to attract international students into Australian financial advice courses.
“The introduction of the unit group 2121 Financial Advisers and occupation 212131 Financial Adviser will assist in ensuring accurate information is being promoted about the legal requirements for practising as a financial adviser in Australia,” it said.
In August 2023, the ABS recognised the financial advice profession with in-principle acceptance of the FAAA’s recommendation to use the protected terms “financial adviser/financial planner” as the principal title of its occupation unit.
“Improving the ANZSCO to better reflect the provisions in the Corporations Act and current roles and practices in the profession is critical as its classification of occupations underpins the data set that informs all government policy decisions including on vital matters such as immigration, education and training, financial literacy and financial services,” the FAAA said in a statement at the time.
The ANZSCO update is expected to be finalised in December 2024.
