Financial services Minister, Stephen Jones, said the Albanese government is committed to improving the professional qualification framework in financial advice after consultation on the adviser education standards opened this week.
Originally announced earlier this month, Mr Jones said the government would look at options to “streamline the education requirements for financial advisers” and addressed the 30 September deadline for existing advisers to pass the exam and continue to provide financial advice, saying that following the deadline, he will ask Treasury to explore how the exam can be improved, such as reducing the number of questions.
This week, Mr Jones said the government wants to attract talent back into the advice industry.
“By treating seasoned, respected advisers like undergraduates, the previous Coalition Government drove much-needed experience out of the industry without addressing quality of advice standards,” Mr Jones said.
“The consultation paper released today proposes removing the requirement for a tertiary qualification if an adviser has 10 years’ experience, a clean record, and has passed the relevant exam.
“It also proposes several options for amending current education requirements on new industry entrants.”
News of the consultation was met with mixed reaction by industry stakeholders following its announcement just weeks ago. The Association of Financial Advisers (AFA) CEO Phil Anderson welcomed the news, telling ifa he is pleased that the government is looking at how to better recognise prior learning and experience, and how additional pathways can be made available for new industry entrants.
“There are a large number of advisers who are very anxious, having sat the financial adviser exam in recent weeks and awaiting their results,” Mr Anderson said.
“The minister has been clear in his media release that the deadline for passing the exam remains 30 September 2022, and impacted advisers will need to plan on this basis.”
Meanwhile, the Association of Independently Owned Financial Professionals’ (AIOFP) executive director, Peter Johnston, also welcomed the news. However, he added that the industry group is “naturally disappointed” that Mr Jones did not defer the exam until after the 1 October “cliff” date to restructure it.
“We were hoping for a 12-month deferral of the exam, a removal of the ambiguous ethics content, and inclusion of questions around competency of their advice specialty,” Mr Johnston told ifa.
“To be fair, the minister did not specifically promise any exam changes, but we will however continue with our lobbying activities until October 1st in hope of a change of mind.”
The Stockbrokers and Investment Advisers Association (SIAA) also backed the move after CEO Judith Fox slammed the current standards as “shameful”.
“The education standards required by recent legislation focused on financial planning qualifications and did not take into proper account the decades of qualifications and CPD stockbrokers and investment advisers had undertaken,” Ms Fox told ifa.
“Many in our industry also have graduate and postgraduate qualifications suitable to working in equity markets, yet these were not considered approved degrees.”
Submissions are now open and will close on 16 September 2022.
Insert eye-roll emoji here….
“Let’s seek feedback so we can consult and then consider and then review and then maybe decide…..” (regarding something we decided almost a decade ago and which should be dead and buried and long-forgotten by now!
Imagine if we’d have spent just one fifth of the time we’ve wasted debating this AFTER it was decided on more fruitful things like technological solution, client needs and service standards, staffing solutions, etc….
God forbid we look ahead and prepare for the future and actually run the business of tomorrow.
No wonder so many businesses are struggling.
How many are still living in the 20teens?
Unfortunately Jones has failed to deliver on his promise of reviewing the restrictive RPL rules imposed by FASEA, that fail to adequately recognise many of the university level courses advisers have completed. Advisers are being forced back to uni unnecessarily because of this.
The “experienced adviser pathway” may be a workaround for some, but plenty of advisers with good quality education and less than 10 years experience prior to 2019 will continue to be penalised. Most university educated advisers who do qualify for the experience exemption would still much prefer to have their education appropriately recognised, rather than carry the “undereducated” taint of the experienced adviser pathway.
The proposed change will not require “at least 10 years experience”. It will effectively require at least [b]17 years experience[/b] when it takes effect on 1 Jan 2026, for any remaining advisers who don’t meet the education requirements. It requires 10 years of experience [i]prior to 1 Jan 2019[/i].