On Tuesday, the government opened consultations on an exposure draft bill and explanatory memorandum to deliver its election commitment to recognise experienced financial advisers who pass the exam, have 10 years of experience and a clean practice record.
Applauding its move, Sarah Abood, the chief executive officer of the Financial Advice Association Australia (FAAA), said the announcement gives much-needed clarity to those advisers in the profession who have been counting on this change to support their goals to continue advising clients beyond 2026.
“We believe that relevant experience is an important element to maintaining the required standard for professional, quality financial advice that will provide the best outcome for Australians,” Ms Abood said in a statement emailed to ifa.
Nevertheless, she reiterated the group’s earlier stance of advocating for limitations on the pathway and announced that the FAAA would consult extensively with its members to finalise its submission.
“We continue to feel strongly that there should be a time limit on the pathway such that a relatively young adviser does not continue to practice indefinitely without relevant qualifications,” Ms Abood said.
On the upside, she said proposals to increase the flexibility around approving relevant qualifications for new entrants are particularly welcome.
“We have raised many instances where small course changes (in some cases as little as a unit name or number change) have led to qualifications being disallowed which do not fit the exact language of the relevant determination. This is extremely disheartening for students who have successfully completed these courses, and we are hopeful that more sensible flexibility will now be available.
“The FAAA will continue working closely with the government to help make financial advice more affordable and accessible to Australian consumers, as well as providing clarity and appropriate flexibility to financial advisers about their education requirements.”
Neil Macdonald, the CEO of The Advisers Association (TAA), echoed Ms Abood’s views on imposing additional limitations, stating that while TAA supports increasing access to affordable personal advice for consumers, it is essential to put guardrails around experienced advisers who lack qualifications.
“We previously suggested making this clear in their Financial Services Guide and having a sunset clause of 10 years from 1 January 2026. Combined, this would mean better-informed consumers with access to advisers, and the sunset clause would stop potentially 35-year-old’s being grandfathered for life without any formal qualifications,” Mr Macdonald told ifa.
“Initially, in our previous submissions, we suggested at least 15 years of experience to 31/12/25. If there was a sunset clause, we are less concerned about whether the experience is 10 or 15 years and to what date. In our response to this submission, we will ask for a sunset clause and would not push for 15 years even though that was our preference,” he explained.
Also speaking to ifa on Tuesday, Peter Johnston, a long-time supporter of the experience pathway, described it as a “common sense, fair approach to difficult circumstances”.
The executive director of the Association of Independently Owned Financial Professionals (AIOFP) said: “The Opposition has already supported the conditions both pre and post the last federal election, it should therefore pass both houses of Parliament without incident”.
“This is a great step forward to save the risk industry, the next objectives are to increase the commission numbers and have an industry-specific exam format,” Mr Johnston added.
The CEO of the Stockbrokers and Investment Advisers Association (SIAA), Judith Fox, joined in applauding the pathway and said that it was necessary to prevent the loss of experienced advisers.
“A further exodus of experienced advisers was on the cards without draft legislation confirming the experienced pathway,” she noted.
“At a time when the advice gap is recognised, losing more experienced advisers makes no sense and it is to the government’s credit that they have acted to prevent additional loss of expertise.”
SIAA noted that experienced stockbrokers and investment advisers put their education on hold when the Labor government was elected in May 2022, in light of the Minister’s election commitment to introduce an experienced pathway.
“The release of the draft legislation setting out the form of the 10-year experienced pathway for advisers provides the much-needed certainty they have been seeking,” Ms Fox said. “They know that their education qualifications and wealth of experience are being recognised and their clients will retain their advice services.”
Advisers have been divided on the experience pathway since it was first announced by Financial Services Minister Stephen Jones ahead of the 2022 election, with the ifa’s comment section reflecting that divide on Tuesday.
Namely, many advisers appeared to be supportive of further education and viewed it through a self-development lense, with one adviser writing: “This shouldn’t be an excuse for not meeting a high standard of education like the advisers who are currently licensed”.
Another added: “I would never recommend my family or friends to see any used car salesman financial planner without appropriate qualifications.”
Just last week, Wealth Data suggested that as many as 3,166 advisers could benefit from the government’s announcement.
I can’t find any details regarding the sunset clause anywhere? Apologies for sounding naive, however does it mean that experienced advisers who qualify without further education (meet the experience pathway) need to complete the stated education requirements by 2036 anyway? I would appreciate any feedback about this. Thanks
The TAA and FPA have both seen their respective memberships have been decimated. I wonder if they are the right groups to guide us moving forward?
I’ve been in the industry over 30 years and I demand that my mountain of experience be recognized as superior to that of a text book experience! This whole thing is BS. Walk in with NO STUDY and kill the stupid FASEA exam easy as but apparently I am not worthy of my job? How do these younger uni experienced advisers or worse yet the so called industry experts who have never been a sucsessful and truely trusted professional adviser managing 1,000’s of clients over the years and have $100mil to $150mil to manage of FUM/FUA have the right to think they have more say than I do?? Total BS! They most likely just want to remove more of their competition and increase their profit margins.
Agree almost totally.
But also as a well experienced 25 yrs Adviser, AFSL manager 18 years.
And well educated, Econ & Business Law degree, DFP, SMSFA, Estate Plan Specialst and the freaking FARSEA exam and mind numbing Ethics course.
There needs to be a Sunset clause, 10 years.
Given there has already been 5 years to do study plus another 10 yr Sunset clause.
Add in some better recognition prior learning too.
Those objecting have lost sight of the reality that most learning occurs when working on a client file, not in a University.
So you have to already be an adviser to qualify and new entrants to the industry need meet the new educational rules, right? So what are the FPA and TAA talking about?
Julie there is a big difference between advisers and GP’s in your comparison. No GP was able to go and start a business and operate for 20 years to then have someone say wait, we are sending you back to study and have their lives turned upside down.
Advisers who had the required qualifications all those years ago and have been able to keep a clean record and help customers for many years haven’t stayed in the industry by fluke its genuinely because they are good at what they do and have been able to help many Australians.
Of all the advisers banned recently any of them have degrees? Surely not because if they did they’d never do anything wrong…… What a joke!
“We believe that relevant experience is an important element to maintaining the required standard for professional, quality financial advice that will provide the best outcome for Australians,” Ms Abood said
……………..I thought the whole point was to LIFT standards? Not ‘maintain the required standard’ which has been proven wanting many times? Another FPA CEO who’s lost my support already.
I remember reading the FPA submission to FASEA and falling off my chair. You know the one they “gifted to FASEA”.
The FPA put in a submission to FASEA saying the meaning of a degree should be their FPEC meaning. That being a Bachelor of Financial Planning. Dante De Gori gloated about how they had “gifted FASEA”… They said a Degree would be worth 20 points, Past real world experience CPD 10-20 points out of 100 and wondered why the CFP course were useless… FASEA clearly confirmed they consulted with the industry and adopted the FPA proposal.
6 years on they’re back tracking, back flipping, but yet no apology to members, no one got moved on, they in fact got rewarded and made the CEO of CFP brand. Possibly the worst proposal, the least consulted on ever.
why does the 10 years not work backwards from 2026?
because that would be sensible
Quite simply it was meant to be 15 years. Looking back in time means anyone using this 10 year rule (2007-2021) in 2026 will have 15 years under their sleeve.
If they apply a 2026 ruling and 10 years those people right now have 7 years under their belt. Hardly befitting of the experienced pathway notion.
Imagine this: my GP has no formal qualifications, but, she has more than 10 years’ experience.
I’ve never asked my GP for his qualifications.
you haven’t needed to. It’s assumed.
Fair point, but for GP’s it is a matter of life or death. In Advice – it’s either good or bad, and bad advice results in a PI claim.
Imagine this: a GP with formal qualifications but no experience.
that’s not possible and not possible under the current system either in Advice. Times have changed and you haven’t.
You read Michelle Levy’s recommendations?
Imagine your GP was qualified to 10 years ago, and now the rules have changed and new qualifications are required – the latest Degree from Uni – would you expect your GP to go back to University -isn’t that what CPD is all about?
Imagine this: my ‘adviser’ with my Industry Super Fund has no formal qualifications, but, has no experience.
Gold. LOL
Possibly a better outcome than your GP that has formal qualifications, however no real experience!!
Imagine this, your surgeon has a degree but has never been in an operating theatre
I don’t see the relevance. A GP makes potentially life or death decisions. Advisers on the other hand don’t make life or death decisions, are monitored by their Licensee, have professional indemnity insurance for providing bad advice, and are regulated by ASIC. In addition, advice received by the recipient can be questioned by appealing to AFCA if the recipient feels they have received poor advice. How is this anyway like a GP?
One industry is treated like a Profession with Professionals. Another is full of people who think they’re professional but belong to an industry and as a result are blamed for every mistake and contributed to Australians inability to receive advice.
Which is why we have a massive shortage of GPs in Australia. Too much focus on University education & not enough real on the job learning.
Not exactly apples with apples.