The AFA has expressed "serious" concerns about the government's draft covering new adviser standards, saying the experience and competence of existing advisers need to be recognised in the transition pathway.
Responding to the government's draft legislation – which states prior learning will be measured by the types of courses that advisers have completed – the AFA said that considering years of experience in lieu of degrees could prevent many advisers from retiring early.
"Older, experienced advisers who are already recognised with a strong and untarnished track record of giving quality advice, who have abided by professional association codes, and who have shown a long-term commitment to keeping their professional development current, should not be subject to unnecessary red-tape to re-validate their competence," the association said.
"Whilst in their later years as a practising adviser, the prospect of facing considerable time, cost and the stress of completing new degree-equivalent courses and doing an examination that is not reflective of operating in the advice environment, will drive a significant number of quality advisers to consider earlier retirement.
"The prospect of thousands of quality, experienced advisers exiting early over the next 3 years is an extremely concerning consequence of the proposed framework if it is implemented without changes being made," the AFA said.
The AFA recommends the minimum qualification level for experienced advisers with clean records be set at AQF6, in line with the Advanced Diploma of Financial Planning. The association also suggested exempting specialised advisers from comprehensive assessment requirements that "would not be relevant for giving advice in their specialist area".
In addition, the independent standards-setting body, which will begin operating on 1 July 2016, should include at least one director with recent practitioner experience in a small advice practice, the AFA said.
"The impact of these changes will be felt greatest within the ranks of small business advisory practices," the association said.
Also raising concerns about the draft is the Association of Superannuation Funds of Australia (ASFA), which said in its submission that two years is not enough time for existing advisers to become degree-qualified.
"Noting that under the Australian Qualifications Framework the volume of learning (assuming full-time study) for a level 7 bachelor degree is three to four years, there does not seem to be adequate time for advisers to become qualified," ASFA said.
"We submit the commencement date for requiring the relevant qualification be moved out to three years after the date the standards body approves the qualifications."
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