So, the government is now proposing to wind back the requirement for a degree for advisers with a minimum of 10 years’ experience as an adviser, and a clean record. The proposal comes following a call on the issue from Labor earlier this month.
It’s refreshing to see politicians thinking about how to solve the supply/demand advice gap. We will be making a submission on the new proposed education standards and look forward to contributing to a debate that looks for workable solutions that ensure consumers and clients can access professional personal financial advice.
My opinion column on ifa last month on this very topic touched a nerve.
I suggested then that older, highly experienced advisers, who have passed the FASEA exam and met previous qualification standards and ongoing CPD requirements, might be provided with an extension and potentially exemption from further tertiary-level study. The thinking behind this was to allow the clients of these advisers, and other Australians, to continue to access advice.
I believed then, as I do now, that older, highly experienced advisers who won’t get a degree could be allowed to continue to service clients who clearly still need and value their services for a period of time, giving newer entrants time to join the profession, gain the requisite qualifications and, importantly, experience, and help to close the supply/demand advice gap.
We received a lot of messages from older advisers, many of whom thanked us for raising the issue, but we also received a lot of comments from other advisers saying that no adviser should be given a free pass around tertiary education, regardless of age or experience.
We happen to agree. We strongly support the move to greater professionalism of financial advice and that has to mean higher education standards. So, to be very clear, we do not support giving concessions to people who have not bothered undertaking appropriate ongoing education. What we do support is allowing older advisers who have passed the FASEA exam, who continue to complete CPD, who have demonstrated that they are highly competent and experienced over many years, and who are highly valued by their clients, to continue doing what they are doing beyond 2026, without having to get a new degree.
But we also believe a line needs to be drawn in the sand somewhere. There needs to be a firm date after which older advisers without these qualifications can no longer practise. Allowing them, or anyone else, to continue to practise indefinitely runs counter to professionalism.
We are also pleased to see that the government will look at opening up pathways to financial advice by broadening the tertiary programs and prior learning that qualify new entrants to join the profession.
We welcome this broader approach because the current rules only recognise a handful of Australian university qualifications as “relevant” degrees and do not give enough recognition of, or credit for, degrees or higher degrees from other countries, which seems slightly incongruent for a country like Australia, that has encouraged skilled migrants over many decades.
The current approach is also inconsistent with the 2017 Professional Standards Bill explanatory memorandum requiring the FASEA education standard to address: “For the avoidance of doubt, the new law explicitly states that courses undertaken before the new law commences must be taken into consideration. The body may take into account diploma or degree courses, licensee training courses or CPD.”
There are advisers in our community and in this cohort of older advisers who hold master’s and PhD qualifications. Some advisers hold multiple degrees, including degrees from some of the most esteemed educational institutions in the world. Yet, for some reason, they are currently required to go back almost to the beginning, despite these qualifications and despite the fact that many also completed the highest level of financial advice studies at the time, have passed the FASEA exam and completed ongoing CPD, sometimes over decades.
We believe there needs to be more thought around what completing a degree program actually means.
When you complete FASEA and undertake ongoing CPD education, FASEA says you have demonstrated competency – i.e. that you have the skills, knowledge and attitude to do the job you are required to do. When you complete a degree, any degree, you have demonstrated higher-level critical thinking and conceptual reasoning, rigorously and academically. Completing a degree is a hallmark of a profession, and recognition of financial advice as a profession has long been the goal of this industry.
Should we give a free education pass with no expiry date to every adviser who has been around a long time? No.
Should we give a free education pass with no expiry date to older advisers, just because they are old and have been around a long time? No.
Should we allow older advisers, who have demonstrated competency over a very long time, to keep servicing the clients who need them a little longer, perhaps to 2030? In the interests of those clients, yes. But not forever. We can’t have our professionalism cake and eat it.
Neil Macdonald, chief executive, The Advisers Association
Industry groups within the advice sector fronted a Senate economics committee on Thursday (27 January). ...
Taking control of financial planning during uncertain times such as the COVID-19 pandemic is proving greater benefits than “simply building a better...
A financial services software provider has announced it will acquire a self-licensed planning business. ...