The explanatory memorandum of the draft legislation released on Tuesday sets out the steps financial advisers who wish to rely on the new experience pathway need to take.
Namely, according to the paper, advisers would be asked to make a self-declaration confirming that they have met all the criteria to be an experienced provider.
If a financial adviser is an authorised representative of an Australian financial services licensee, they “must” provide their self-declaration to the licensee.
Moreover, a notice must then be lodged with the corporate regulator within 30 business days of the financial adviser becoming a relevant provider (for example, if someone is not a current relevant provider), or within 30 business days after 1 January 2026 for existing relevant providers.
According to the explanatory memorandum, the notice “must” include identifying details of the relevant provider, and a written statement to the effect that the person has met the education and training standard because they are an experienced provider.
The written statement is to be provided by the financial adviser, if they are an Australian financial services licensee; or the Australian financial services licensee who authorised that financial adviser as their representative.
Upon receipt of such a notice, the Australian Securities and Investments Commission (ASIC) must then update the register of relevant providers to reflect that the financial adviser has declared that they meet the criteria for an experienced provider.
The memorandum explained that the notice requirements are consistent with the existing notification requirements applying to relevant providers.
“Consistent with existing obligations, Australian financial services licensees are held accountable for authorising an ‘experienced provider’ to provide financial advice as a representative of that licensee. The individual financial adviser is accountable for making a claim that they meet the ‘experienced provider’ criteria.
“Criminal and/or civil penalties apply if either or both the financial adviser or licensee give false or misleading information.”
On Tuesday, Minister for Financial Services, Stephen Jones, said the experience pathway was a “transition measure” aimed to stop the exodus of experienced advisers, with no history of misconduct.
“The Albanese government is committed to an advice industry with strong professional standards that gives Australians access to high-quality financial advice. This has been made more difficult by the previous government’s mishandling of the new education and qualification framework,” Mr Jones said.
“Since 2019, over 10,000 financial advisers have left the industry in response to new standards. Many were unsuited to the requirements of the new industry, which include professional qualification. However, this has pushed some experienced advisers, with no history of misconduct, out of the industry, reducing access to advice,” he continued.
Consultations on the experience pathway are open until 3 May.
“to stop the exodus of experienced advisers” – Jones has to be kidding – most of them are already gone, certainly all those who are able to leave especially all the risk specialists of 20 – 30 years experience, the smart ones anyway!
I am an older adviser (I’m 66). I did my Dip FP CFP in the late 1990s. I have a prior LLB degree. I’ve held technical, compliance and advice roles over the last 27 years. I am an accredited aged care and SMSF specialist. I have no history of misconduct I had to pay almost $10K and do 6 subjects to obtain my Graduate Diploma of Financial Planning as my qualifications were apparently inadequate. I passed the adviser exam at my first attempt. Now I find out I could just have promised that I knew what I was doing! Is it any wonder our industry has such reputational issues.