In early September, Parliament enacted the experience pathway legislation, which qualifies an adviser as having satisfied the educational prerequisites if they have 10 years (cumulative) experience providing advice between 1 January 2007 and 31 December 2021, along with an unblemished record.
The announcement of the pathway’s approval elicited a mixed response within the industry, with both joy and dismay creating a relatively even divide.
Speaking to ifa on Friday on the sidelines of a breakfast event organised in Wollongong by the Financial Advice Association Australia and the Financial Services Council, Mr Jones underscored the significance of the pathway as an integral component in the professionalisation of the industry.
“We’re on a pathway towards professionalising the industry. This is a very pragmatic, once only, through the gate, then the gate is closed, mechanism to ensure that we don’t throw the baby out with the bathwater,” Mr Jones said.
“There are financial advisers who’ve got an accountancy degree, who are tax practitioners, who might have a master’s degree in a relevant field, but they haven’t got all of the qualifications in the existing pathway, who are serving their clients and their staff well, and mentoring new advisers. It would be a bit nuts to say to those people, ‘You’ve got to leave the industry’, when we’ve got a critical shortage of advisers.”
The minister added that the experience pathway is “a very pragmatic solution” and stressed that it doesn’t diminish the fact that the industry is progressing towards professionalisation.
Earlier in the day, speaking to a room full of advisers, Mr Jones addressed the significant exodus of advisers over the past few years.
“Frankly, not everyone that has left the industry is a national treasure,” the minister said.
However, he added that a review of the qualifications framework needs to be conducted if the objective is to expand the industry, which currently consists of under 16,000 advisers.
“I am here for a professional industry,” he said.
“So, whatever we’re doing in that area will be about ensuring we maintain an appropriate model for professionalisation. But we’ve got to find more ways for people to be able to enter the industry, more ways for people to get the appropriate qualifications to practice in the industry than we have at the moment.”
The minister added that unfortunately, most Australians, especially young adults at 18, don’t typically aspire to become financial advisers.
“No offence should be taken at this, but kids at the age of 18 aren’t waking up, unless they’re related to you, and saying ‘I want to be a financial adviser’,” he said.
“They might be saying, ‘I want to be an accountant’ or ‘I want to do a commerce degree’, or they might be saying, ‘I like law’, or they might be saying, ‘I want to study economics’, we’ve got to look at a way that we can marry up the core knowledge, skills, and experience that we expect in any profession with the way that people are actually entering and making their way through university.”
Mr Jones had earlier announced that he would turn his attention to a new entrant pathway in the back half of 2023 – a pathway that has been in discussion since 2021.
Namely, the new adviser pathway and the experienced adviser pathway have been closely linked since the previous Liberal federal government issued a consultation in December 2021.
But while both the previous government and the current Labor government have consulted on the pathway, there’s been no meaningful movement on the new entrant front.
The most recent consultation gave three proposals for new entrants:
- Streamline core knowledge areas from the current 11 to a proposed five.
- Allow education providers to self-declare that the degree they are offering teaches the core knowledge areas.
- Streamline the professional year by introducing more flexibility in how candidates are able to complete it, including the point at which they have to pass the exam.
A third consultation is now said to be in the works. But it is unclear how similar the upcoming consultation’s recommendations will be to those in the August paper.
According to Wealth Data, as at 28 September, there are 15,710 advisers in the industry.
still no conversation about the loss of our money due to our trail books being taken away.
the minister , licensees and adviser should not let this be forgotten it cost me a fortune!
“Frankly, not everyone that has left the industry is a national treasure,” the minister said.
Frankly, not every politician is either Stephen…
So glad I jumped in after 20 years in the business and did the degree. So worthwhile. Waste of money and time ..to whom do I send the invoice for 18 months of lost productivity?
I know a Minister or two that I wouldn’t consider a National Treasure either.
Funny, since one of them IS the National Treasure(r), and another IS the Deputy National Treasure(r)…
when its time its time
This whole exercise is akin to watching an 8 year old trying to drive a car for the first time. Wow.
once again a joke from the minister, I graduated my degrees in 2010 & 2011, started in the industry in September 2012, but by the cut off dates December 2021, I miss out by 9 months. so, I have still have to sit the ethics course, that I passed the FASEA course on my first shot, Day 2 of the first FASEA exam.
my degrees are deemed appropriate degrees when accompanied with the Ethics course.
It is now 2023, and I am still here still working, still seeing clients, so now I am up to 11 years’ experience. But off to do an ethics course, that I have already the FASEA exam for…
Mr Jones, if you truly want to see a profession, then review the current licensing structure. The profession and the consumer would be far better off without the middleman holding an Australian Financial Services License. The AFSL adds no value to the equation other than clipping the ticket on the way through on each transaction.
Whats wrong with getting thew experience pathway cohort to do a couple of modules?
Nothing, if it can be done in lieu of 80 hours a year of CPE. Plus it can be done at your own discretion, not under threat of deregistration – ie at your own pace, when you have time available. But now this legislative mess has created a massive shortage of advisers, so we will never have any free time for a decade now.
Get it right: Advisers have had sufficient time to get the degree and, our children do not want to endure the same crap that you’ve now forced upon us.
Clearly, you lot are not national treasures, either.
Captain obvious is showing his ignorance of the issues at hand. Plenty of Advisers had degrees but still had to do the education and they did it….hilarious comment saying “Frankly, not everyone that has left the industry is a national treasure,” the minister said.” ….way to offend some 7,000 Advisers.
I don’t know what his point is? The new standards make it easier for these people to either stay in or rejoin the workforce.
There are also many competent female advisers who have left the industry, in part because they didn’t do adviser studies, simply to waste half their life chasing up Annual Fee Renewal Consent Forms (red tape that simply doesn’t exist in any other jurisdiction on the planet). Quite simply, it is an insult to their intelligence, plus an unnecessary red tape annoyance for consumers, who know they can request turn off the regular service support fees anytime they wish. These young people & female advisers can see a ridiculous time waster when they see it.
While Stephen Jones should be congratulated on identifying more people to enter the industry, the massive service support gap that now exists will never be filled until the AFRC Forms are replaced with a one-off Fee Consent Form, or are eliminated entirely.
Kids who are related to us defintely don’t want to follow in our foot steps when they see what we deal with!
and if they did, most parents would discourage them from doing so.
All these consultations on how to make education easier so we have more advisers but really we just need to reduce advisers fees (licensing costs are out of control, what industry do you know that charges more than $50K pa to open the door!) and reducing red tape. Invest in fintech that works. Education standards need to be high, the barriers to entry are the red tape and high costs to serve. The burnout is real people! Politicians are not helping those of us who committed to stay.