On Tuesday afternoon, Treasury announced a consultation on Corporations (Relevant Providers—Education and Training Standards) Amendment (2024 Measures No. 1) Determination 2024.
Under the education and training standards for relevant providers outlined in the Corporations Act, a person must complete an approved bachelor or higher degree, or equivalent qualification, or foreign qualification, that has been approved by the minister.
According to the explanatory statement released alongside the exposure draft, part of the implementation of Treasury Laws Amendment (2023 Measures No. 3) Act 2023 in September 2023 included an amendment to the qualifications standard in section 921B of the Corporations Act, which enabled greater flexibility for a new entrant to demonstrate that they satisfy the conditions of an approved degree/qualification.
These conditions generally relate to the time a person commenced the approved degree/qualification and the specified units of study that the person must have completed.
“This information would ordinarily be evident from the person’s academic transcript for the approved degree/qualification. However, this is not always the case,” the explanatory statement said.
The latest draft legislation amends the Corporations (Relevant Providers Degrees, Education and Training Standards) Determination 2021 to enable financial advisers to demonstrate that they satisfy the conditions of an approved degree/qualification in the following ways:
- Via academic transcript(s) issued by the provider of the approved degree/qualification, which demonstrates that the person has met each of the approved conditions for that approved degree/qualification.
- Via statement(s) issued by the provider of the approved degree/qualification, confirming that the person has met each of the approved conditions for that approved degree/qualification.
Bryn Evans, an adviser at Integro Private Wealth, said that as things stand, the requirements for aspiring financial advisers are “extremely prescriptive”.
“It involves a specifically approved AQ7 financial planning major in an undergraduate degree or the completion of a specialised post graduate diploma or master’s degree in financial planning. These extra studies, as well as the increased fee for sitting the adviser exam, come at significant expense on top of what it costs firms to sponsor a professional year candidate,” Mr Evans said.
“It is welcome news that there is a proposal to provide greater flexibility in how new entrants can demonstrate they have substantively met the education requirements. Any way we can simplify the pathways to a career in financial advice while upholding the education and professional standards is worth exploring.”
Minister for Financial Services Stephen Jones previously said the government would focus on the new entrant pathway in the back half of 2023. However, what these amendments to certain legislative instruments appear to do is extend a few additional benefits to new entrants beyond those included in the experience pathway, while stopping short of introducing a whole new pathway.
The draft legislation further amends the Corporations (Relevant Providers Degrees, Education and Training Standards) Determination 2021 to address transitional limitations in the provision of tax (financial) advice services.
The draft legislation changes the transitional arrangements for tax (financial) advisers so that an adviser will be considered to have met the education requirements to be a qualified tax relevant provider if they were registered with the Tax Practitioners Board or had a registration application pending before 1 January 2021 regardless of whether they were authorised as an adviser on that day.
The explanatory statement said that, as currently drafted, the transitional arrangements would only apply if the person was a relevant provider immediately before the new regime commenced on 1 January 2022.
“However, this means that if a person was temporarily not a relevant provider at that time, they would not benefit from the transitional arrangements,” it said.
“This includes advisers who may have been on leave – such as maternity/paternity leave or long service leave – or who may have been temporarily in between licensees. This has unintentionally restricted the provision of tax (financial) advice services.”
As a new entrant who recently had to complete a FASEA approved postgraduate degree, this move appears to undo the work of recent legislative changes and our collective move towards a profession. Very disappointed.