The Financial Services Council has warned that unless an omnibus bill is passed before 1 January 2026, an “inadvertent drafting error” could see more advisers unable to practice following the education standards deadline.
Drafting errors have plagued the Labor government’s financial advice reforms since early last year, when an issue with the first Delivering Better Financial Outcomes bill included language that would have effectively stopped general advice providers from utilising the exemption on conflicted remuneration in section 963B of the Corporations Act.
The latest issue is one that the government is seeking to address through the Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025, which is currently undergoing review in the Senate economics legislation committee.
Schedule 5 of the bill contains a minor and technical amendment to correct an “inadvertent drafting error” in Section 1684A of the Corporations Act 2001 relating to the transitional arrangements for existing financial advice providers to meet the qualifications standard.
In its submission to the review, the Financial Services Council (FSC) noted that in transitioning to the new professional standards, financial advisers have “reasonably relied on the existence and availability of this qualifications pathway to maintain their authorised status beyond 1 January 2026”.
“Maintaining this pathway is critical to ensure many financial advisers can continue to provide advice to the many Australians who currently rely on it,” the submission said.
Existing providers have until 1 January 2026 to meet the qualifications standard to maintain their ‘relevant provider’ status to be authorised to provide personal advice from that date.
Under the current rules, existing providers can meet the standard by either completing an approved qualification, completing qualifications the minister has determined to be equivalent to an approved qualification for existing advisers, or by accessing the experience provider pathway.
“The amendment in this bill addresses a previous change to the law which removed access to the alternative qualification pathway as a means of meeting the standard for existing providers,” the FSC said in its submission.
“The alternative qualification pathway allows existing providers to meet the qualifications standard by completing the necessary top up courses determined by the minister.”
The FSC noted that given the number of financial adviser numbers in Australia has gone from around 28,000 in early 2019 to just over 15,400, there has also been a subsequent reduction in the supply of advice, and, alongside other factors, increased the cost of advice to consumers.
“The prospect of increased access to quality financial advice through Tranche 2 of the Delivering Better Advice Reforms remains within reach,” the FSC said.
“However, with the transition to the qualification standards at 1 January 2026 likely to be another natural attrition point for adviser numbers, Australia cannot afford the additional uncertainty for financial advisers and their clients which this inadvertent drafting error could cause.
“It is therefore essential that the Parliament passes this amendment prior to 1 January 2026 to maintain the alternative qualifications pathway.”
However, there are limited opportunities remaining before the education deadline hits, with the final sitting week for Parliament running from 24 to 27 November.
The alternative qualification pathway –
Please provide a clear example of such a pathway ?