On a recent episode of the ifa Show, Mia Johnson of Keyman Financial Services in Sydney discussed contention around current requirements – which require existing advisers with no degree to have an approved qualification by 1 January 2026 – and said there are other areas of concern that could see more walk.
“For example, the cost of advice. I mean, I understand that’s a huge issue,” Ms Johnson said.
“My concern at the moment is that when the time comes, 2026 rolls around, I feel as though we’re almost not going to have an industry left because everybody’s going to leave.”
It comes after the government recently announced its Education Standards for Financial Advisers policy paper that proposed a pathway that streamlines the minimum education requirements and recognises on-the-job experience for individuals with 10 or more years of full-time experience.
Ms Johnson, who is midway through her professional year, said she is making an effort to encourage younger people to get into the advice industry on the back of recent news that adviser numbers are expected to dip below 16,000 next year.
She added that older advisers she has spoken with aren’t looking to exit the industry completely and want to offer their knowledge and experience to younger generations of advisers coming through.
“So whether that’s mentoring younger advisers, or taking on more of a coaching type of role, I think there’s a lot of opportunity for people who want to exit without doing the education requirements to still leave a legacy and to leave a mark on the industry,” she said.
Listen to the full episode here.
The main reason the industry is declining is because bad regulation has made professional financial advice too complex and expensive for most consumers. Consumers are being increasingly drawn to unlicensed shonks and scams for financial advice instead.
There will be more than enough professional advisers left in 2026 to service the small number of consumers who can afford the high cost of decent advice under current regulatory settings.
With young practitioners like Mia Johnson going through her Professional Year, the quality of advice in our industry is in good stead. As Mia rightly points out however, we are attracting a trickle of new young advisers to replace the flood of older experienced advisers leaving the industry in dire straits. Full marks to Mia’s father, respected Adviser Terry Johnson, who is building his family business, Keyman Financial Services, with Mai and her brother Ben both in their Professional Years.
Is anyone aware of a new graduate getting PY employment at a firm where they weren’t already known? The only PYs I’m aware of work in their family business, or a business where they were previously employed for some time in a more junior role.
It’s hard to envisage any practice taking on the costs and risks of an unknown new graduate for a PY.
I think its the opposite…we are going to have an amazing industry for those that do the work and decide to stay. As a profession we can also hope ASIC and the Government reduce the unnecessary red tape that stops us from providing magnificent advice. With the realistic timeframe of January 2026 our industry and dinosaurs like me (30 years in the industry) have had more than enough warning to do what is required.
Adviser numbers are the elephant in the room for the industry and have been for a while. Yes the education standards are the hot topic presently as to whether or not theyre diluted from here. They are part of the afforementioned issue however its the lack of entrants coming in that is the main issue for concern. And that isnt changing any time soon.
The Bank advice model had many faults but one thing that it did well on behalf of the wider industry was make up a large part of the blooding of new entrants. Those newbies eventually left bank planning practices and filtered into the wider netwrok. Now we are expecting private practice to foot the bill and create the next gen on their own during the negative revenue years……….its a massive issue. Even if education standards are diluted numbers are still going to plummet in the short years ahead. Education changes will help fix that but age stops for no one.
Crap –at the age of 61 and 35 years experience I’m not going back to school. I love planning but this is a joke!
this is a result of the FPA and the push push campaign over 20 years. I don’t sympathise the advisers who stay. even blind freddie can see its no longer viable.
SAD STATE of affairs , as knowledge is gained with time and experience which in turn gives a wealth of experience to pass onto our mutual clients and how will this be passed on in the future ?
unlike my experience was gained in my early years when I was being mentored as a young person .
Mia Johnson, you are 100% correct.
The transition of the financial sector to meet the education requirements (including FASEA) has been appallingly managed. There was clearly insufficient modelling (or none) to show the impact of major regulatory change.
Now the impact is clear, experienced advisers leaving in droves and a trickle of new advisers joining. Australians are being left with very limited access to advice as a result. The personal insurance market is in disarray and we are on the cusp of the biggest intergenerational wealth transfer in history. We need access to more advice – not less. We need to stop hemorrhaging advisers, the government needs to support the community and small business by cutting red tape. The evolution is happening but it needs to be managed in a much more considered manner. Or, as Mia says, the future will be grim.
Got to be careful calling someone an adviser when they are still in their PY surely? Not sure that they’re an authority to speak on the state of the industry in the future either. There will still be advisers providing quality advice, just less of us.
Interesting to read Mia is mid way through the professional year. I’m surprised to not hear more about this on the IFA or elsewhere with regard to declining adviser numbers and education requirements.
I’m currently also doing the professional year, and it’s an absolute joke. It’s no different that learning to drive, the only requirement being a ‘logbook’ of hours showing work completed.
It’s also wrong to call it a ‘year.’ The year part is only in reference to the required 1500 hours, being a full year of 37.5 hour weeks. But you can rarely if ever actually record a full days work in the way the year means you to. I am currently 14 months in, and have not even reached halfway, and that is even with the 50% time discount for experience.
As with learning to drive, there is no requirement around what it is you’re actually learning. At the end of the ‘year’, I assume the book is scrutinised, but there is absolutely no reason I can see it can’t be largely falsified.
To that end, I think this part of the education requirements need to be reviewed. The professional year does nothing to ensure a person is fit and ready to provide advice. It is merely an arbitrary check that you’ve put numbers in a spreadsheet, met the study requirements, and passed the FASEA (ASIC) exam.
To help boost adviser numbers, there needs to be an appropriate mechanism to allow licensees to authorise appropriately qualified associates, potentially interviewed by ASIC, to ensure they are fit and appropriate, in conjunction with meeting the study requirements. That would be a far better practice than the current farce of professional year.
The big issue with the education reform is not that it is due in 2026, but that this has been on the cards now for how many years? It hasnt exactly snuck up on us!