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
I’m an “older” adviser at the ripe old age of 55, with 25 years of financial planning experience under my belt. I’ll continue to operate my business and employ local people until I’m forced out by the retrospective education requirements. I prefer to spend my time helping my clients and maximising time with my family.
Unfortunately many of the born again old time advisers I am seeing kicking up a storm about those like myself are the very same ones who had no qualms in taking volume bonuses and dealer group “incentives” ($100’s of thousands of dollars to change licensees for instance) in the past.
We must be careful who we listen to.
I too am heartily sick of these born again hypocrites who have eschewed professionalism their whole career, and are now criticising others for not following their lead in purchasing a crappy “FASEA approved degree” from a glorified TAFE. They seem far more concerned about the possibility of having spent money needlessly if the regulations are amended, than they are about genuine issues of professionalism.
Good article Neil,
A question for my fellow advisers out there…….. When, and at which university in Australia was the very first fully FASEA compliant Bachelor of Business – Financial Planning degree offered ?
To the best of my knowledge, the required fully FASEA compliant “Degree” was only created several years ago.
I have imparted investment advice for 36 years, hold a B Comm & MBA, been an RO/RE at various firms, CPD compliant since the scheme was introduced, no complaints or claims, mentor newcomers to the industry, advise on >$500m of clients’ savings but don’t meet the proposed 2026 education requirements. More than half my clients are retirees, and are not interested in having young Brendan and Sophie, both aged under 26 with all the technical/academic qualifications but five minutes of experience, provide them with financial advice. Where is the logic in requiring me to return to school? How will my clients benefit from this?
Like you, I have nearly 30 years of experience, and achieved CFP status in March 2000. Over ninety percent of my clients are over age fifty five, over seventy five percent have been looked after by me for at least eight years, some for many, many more than that. I have retained my CFP with all associated educational requirements for approaching twenty two years, without incident. And yet, apparently, I will no longer be competent in my chosen profession in a couple of years, unless I return to study to be ‘re-programmed’. And whilst I appreciate the discussion around some form of recognition for all the efforts of the last thirty years, i fear that my clients will be hung out to dry by some of the current attitudes to older advisers, if common sense doesn’t start to be spoken. The problem as I see it is not competence, it’s ethics. And you cannot teach ethics through a fifty question multiple guess exam.
Agree. I’m in much the same age bracket with similar clients. You simply can’t teach life experience in particular how to manage down turns in the market with people whose life savings you are managing. I’ve heard percentage figures bandied around about advisers converting clients funds to cash at the start of Covid (but only after the ‘crash’ in equities). The industry needs advisers with experience in handling these situations without causing detriment to client portfolios. You cannot guess!
I have the degrees etc, but other than the psychology i took as an extra subject and my interest in behavioural finance there wasn’t much history to prepare us for Covid…but there was and is history to prepare us for the way investors act. This is where experience counts and being able to say to your clients, ‘we’re much the same age – I’ve looked after you for 10-15 years, and this is the course of action I am following…”
There is no magic wand to fly around here, however if a finance related degree was done by an older adviser, it should be recognised regardless of its age. Plus ten years of loyal experience is significant for any industry and is not a common feature of today’s employee, in addition ten years is recognised by some professional bodies in areas like IT and Tax. I am a new entrant but I do not begrudge older advisors who do not have the qualifications at this stage. If you step back in time to the 1980’s these pieces of paper were not of the utmost importance to gain employment in numerous industries, as we step into 2022 they are now due to the GFC.
I don’t agree with the 10 year change however it needs to be amended so that any finance related degree is considered suitable.
Nice article Neil, I only have one issue with the 10 years. It should be 10 years of experience when the legislation changes were brought in (2018). 10 years experience as of 2026 does not sound like fairness, it just sounds like laziness from advisers that have had plenty of time to get their studies done.
I have been in the financial planning industry nearly all of my adult life. I have been an adviser for over 20 years. There is already a firm date and a ‘line in the sand” as you say. That date has been set, all advisers have had plenty of time and plenty of warning to upgrade their professional education. Not only has this date already been set in stone, we have had fair warning over many, many years that additional formal education would eventually be required of all of us.
Many years ago there was an opportunity to sit your FPA CFP qualification without doing all the required units. You could get the books sent out to you, study the content and sit one exam and magically get your CFP qualification. There would be older advisers still practicing that obtained their CFP qualification this way. I have been in the industry a very long time and even if nobody else can remember this, I can. The FPA should be held accountable for this bogus issuance of the CFP designation as well. Formal degree level qualifications are what is required without skipping steps anywhere. Enough is enough.
As you also point out, we cannot have our ‘professionalism cake and eat it”. Our time is now, our opportunity to finally be regarded as professionals is here. A resounding NO from me!
In one of the Gartner Conference on Data Analytics, it was noted that Australia got the one of world best retirement schemes with SMSF option. Having a PhD & Masters in Data Science, Honours Bachelors in IT, completed RG 146 Compliance course for SMSF Personal Adviser with a provider. How can I start practicing as an individual Adviser?
If you want to do it legally do an 8 unit Grad Dip in financial planning, pass the FASEA exam, and get an experienced licensed adviser to employ and supervise you through a Professional Year.
If you want to do it illegally, just go for it right now by whatever means you please, and don’t bother with any qualifications or licensing.
The irony is if you take the legal route then when you eventually start practising you will be subsumed by bureaucratic red tape which makes your advice far more expensive and complicated for your clients than it need be, and you will be mercilessly hounded by biased regulators trying to catch you out and destroy your livelihood for the most minor of procedural issues which do no consumer harm whatsoever.
If you take the illegal route there is no need to worry about documentation or disclosure, and the regulators will probably leave you untouched no matter how bad or conflicted or harmful your advice might be.
You can probably see why the numbers of professional licensed advisers is in sharp decline, while illegal financial advice is booming.
At 60, having done FASEA, SMSF and all required CPD, worked as an investment banker, stock broker and now as a financial planning for 15 years, you are telling me that in 2026 I will all of a sudden not be competent, and will need a piece of paper showing I have a degree which will make me more suitable/qualified as a financial planner, please explain how..? We run interns through our office who are more degree qualified than I, but there is no way in the world they would be allowed in front of a client for another 4-5 years..
Great commentary NM. I think the proposed changes as recommended by the Morrison Govt make good sense as a balanced solution to the issue of planners leaving in droves.
What ever happens I will go along with it. I have been in the industry thirty years with twenty three of those as an adviser. Even if it stays at 2026, I’d be happy to be an associate adviser to whomever took over my clients. Would prefer it to be advisers over 60 only get a concession as a degree is too expensive and time consuming to do, only to retire the following year or two. It’s got to be sensible. In the meantime, sell your business and work in someone else’s. Nobody is indispensable
The real problem is that the FASEA exam is not a true guide to our knowledge of ethics. If it was nobody would be complaining. Instead we have a mickey mouse exam that is unfair, ambiguous and misleading. It is designed more so to trip the examinee up instead of helping them. Pass or fail it should not be career ending . That is much too harsh. If you don’t believe me the 48% fail rate speaks for itself.
If the government is so concerned about the number of advisers existing the industry , it’s so easy , get rid of the Mickey Mouse exam now , because it doesn’t prove anything at all , recognize their years of experience and extend the cut off time to ascertain a degree. Not that hard
Being degree qualified was first floated in 2016. Surely 10 years is long enough and already gives all advisers, regardless of age, sufficient time to complete the necessary qualification. That line in the sand should stay at 2016.
My experience as an Adviser for 25 years is that consumers feels Financial Planners have lower qualifications than Hair Dressers and hence richly deserve to be in a highly regulated sector of the economy. Planners were presented with an opportunity to be more than used car salesman, but decided to knock it back…This demonstrates they’re self centered individuals who are more focused on themselves then their peers or “customers”. Customers being the optimum word because professionals have clients whilst other highly regulated sectors need the Government to protect the customer.
Totally agree. The industry has been inwardly focused, at all levels, for as long as I can remember and that’s led us to where we are today. You have made some harsh but true comments.
Very eloquently put, Neil. Had FASEA followed the mandate issued to them, rather than taking the easy course, this proposal by government would be unnecessary and the only ones to miss out would be those who can now slip through the cracks, simply be making it to 10 years at 1/1/26 and keeping their noses clean. The current degree mandate is overreach. The new proposal is a knee-jerk reaction to pressure. As always, the best scenario lies between these extremes.
Great points made and I totally agree.
No the minimum education standards have been talked about for at least 10 years now.
I have been an adviser for 19 years and did the education to remain relevant as an adviser, to become a profession there needs to be a minimum education standard and no free passes ! I am surprised this is even being considered to be honest !!
The tide is turning within the industry against this advisers who think that time in the job with audit passes and some CPD guaranteed pass courses. As more advisers get on board with better accredited education that the public will recognise the troupe of players fighting against change will be seen, and probably already seen, as anchors to our improvement. As the number of under educated advisers reduces the more they will feel the life support for them will be turned off.
older advisers have been given 5+ years already. Why kick the can down the road until 2030 just to serve the interests of a few…. If you think it is good enough for others then do it yourself and stop whining
Good commentary and I would have expected that having a Bach Bus. Accountancy , industry accreditations and the old Securities institute of Australia course, Company Directors course and CPD for many decades would have been appropriate to continue on as a stockbroker, (having already done the FASEA exam and a Ethics Course recently), but at this point in time – this is not considered enough!!!!
Personally I don’t think you should have to do nothing but you also shouldn’t have to do everything — your situation unfortunately is an example of FASEA not having the ability to use common sense. I’d be interested if you would be prepared to do 4 subjects including ethics because I would think that is fair.
How is that fair? He has already completed far more education than most other advisers, and done so before it was compulsory.
There is no reason well educated advisers should be forced to waste time and money on lame courses offered by glorified TAFEs.
Wow, this smacks of ageism!!!
Some of us have been around for over 30yrs and completed the highest level of education available at the time for our profession, and then upgraded to include SMSF, Estate Planning, Equities and Derivatives etc etc.
MUCH MORE importantly we’ve been advising in these areas for decades, me personally in a fee for service only business.
Why do I keep seeing comments by what appears to be younger advisers who think that their more recent education and less experience trumps decades of on the job experience, street smarts and relevant ongoing education? Very sad to see this attitude….it’s not very professional nor tolerant.
I understand your point, and I genuinely feel bad for many of the advisers in your boat. As one of those ‘younger’ advisers, I think the frustration is not so much targeted at your scenario, but more that we have had years to complete education uplifts and many advisers have sat on their hands and not made any effort at all (seemingly).
Trust me, I wasnt thrilled about having to pick up the books after starting a business, but 12-18 months later, Masters qualified and the goal posts cant move too much more for me.
So, it is frustrating that many of us have just taken it on the chin, completed study (and I must add, discussed our own education and experience to get RPL from universities) and many are just clinging on to the hope they can ‘get away with it’ and not do the additional work.