Under the newly passed legislation, an adviser is deemed to have met the education requirements if they have 10 years (cumulative) experience providing advice between 1 January 2007 and 31 December 2021, and have not recorded any disciplinary action on the Financial Advisers Register (FAR) before 31 December 2021. Advisers still need to pass the exam.
There are often two definitive sides of most government decisions and legislation, with members of an affected group coming down on one side or the other, usually with a few subtle gradations that explain why. The experience pathway is a different animal, with the camp that opposes the legislation itself split along ideological lines.
In a poll run on ifa following the release of the exposure draft bill and explanatory memorandum in April, the results were clear: support was split almost exactly down the middle.
For the cohort of advisers that were in favour of the measures, it was easy to understand the motivation. The vast majority felt that way because they would directly benefit from the 10-year experience exemption.
In the comments section of ifa, commenters that agree with the measure praised the government, with a few even pledging to vote Labor for the rest of their lives.
Other commenters echoed the sentiment, albeit with a more tempered outlook for the future: “I seriously didn’t think that Stephen Jones was going to do anything other than make noises. This is a small, but positive step in the right direction. I HOPE this might mean that some more common sense initiatives are implemented in the near future – not holding my breath though.”
It would be easy to think the other side of the debate would follow a similar framework, but that doesn’t seem to be the case.
Instead, there is a further split between those that see the experience pathway as detrimental to the recognition of financial advice as a profession and those that are mad the rules have changed after they obtained degree qualification.
Indeed, it is hard to tell exactly which viewpoint prompted comments like, “A very sad day for the profession” or “What a disgrace”.
What is clear is that while the two camps ultimately come down on the same side of the issue, it has two entirely different motivations.
It’s hard not to sympathise with a group that has taken time out of their business, at no small expense, to do what they thought was necessary to continue their career and business, only to have the rug pulled once the time and effort had already been spent. Many saw little value in the endeavour in the first place and could have avoided what they see as a waste entirely.
Comments such as this exemplify that feeling of defeat and anger: “I spent $15,000 and countless hours upgrading my qualifications and now I do not need it. Who is going to compensate me? Also lost $1.0M in trail commission. This industry is f*****.”
Others called for compensation for time and money lost: “Hi FARSEA/ASIC, please refund the $2K so called Ethics course costs and the 120 hrs x $300 = $38K. An utterly useless Ethics course that pollies, ASIC, APRA, bank execs etc didn’t have to do but really should.”
While more still argued for a return of what they gave up when leaving the industry: “Compensation for the advisers who left the industry because they did not want to do a university degree and now wouldn’t have had to?”
At the same time, the march towards a profession has long been the goal of many advisers. The idea that yet another carve out will hinder that progress is inevitably frustrating for those that recognise the value of such a designation.
Some hoped that there would be a delineation between advisers with and without a degree: “Society won’t view financial planning as a legitimate profession if its practitioners are missing formal education. This is disgraceful policy, but at least there has already been a mass exodus of advisers who were unwilling to do the study. Anyone who sidesteps formal education is cutting corners and their laziness compromises the integrity of the profession itself. Experience counts, but let’s not delude ourselves into thinking it’s a replacement for a university degree. We must now lobby to have the FAR register identify the uneducated advisers aka experience pathway.”
Those that obtained degrees they now wouldn’t have needed were also among this chorus of voices: “Many degree-holders welcome this. The lazy advisers will continue to bemoan the regulatory pressures without acknowledging their contribution to this, in the first instance. Don’t forget to dislike this comment.”
Ultimately, there may not be any definitive resolution to the fracture within the advice profession, but at least everyone knows where they stand.
Genuine question about recourse, is there any way we can bring a group class action to the government over this debacle?
In my business we had 3 AR’s study for the last 3 years, the business expense was over $50,000 and we lost time and business revenue (let alone the serious but financially intangible impacts on our families, health and wellbeing). And now none of it was required…
Is there not a pathway for compensation for the mismanagement of government/government agencies?
And we’re not even the most adversely affected, my heart goes out to those advisers on mental health or other illness claims, or worse, those that left us too soon through suicide. Their families must be absolutely heartbroken and livid that they lost loved ones due to the pressure and uncertainty of the governments action.
whole heartedly agree with you
Those of you purporting that experience is better than education; my business partner and I have 45 years experience between us and 23 years business ownership, we completed the study and got value from it. There were things we learned because it simply was missing from the ADFP/CFP; and the degree covered areas of ethics, law, running a business or specialised advice we hadn’t ever received formal education on, yet we were previously exceedingly qualified to a higher level than minimum educational requirements.
No one should ever presume they know everything because of ‘experience’. The truth is, both are valuable, experience isn’t better than education, education isn’t better than experience, [b]both experience [i]and [/i]education are what make you a professional and a great adviser.[/b]
This legislation is an impediment to being recognised as a true and ethical profession.
A total disgrace indeed. I incurred a $58k hecs debt which costs me 10% of aftertax earnings for nothing. Steven Jones is totally inept to be the one making these decisions.
The difference between the “what a disgrace” and “best day ever” sides is simple, the latter’s entire argument and desire for this win was based on self-interest instead of putting the consumer and profession first.
In the YEARS you had to do the study, I never once heard an argument against it that wasn’t based on the time, cost or inconvenience it would place on the adviser personally. I never heard an argument about how higher educational standards would impact the end client in a negative way.
I incurred the time and cost and inconvenience of upgrading my study, and I comfortably meet the experience pathway, but I’ve got integrity and a desire to further the legitimacy of our profession in the eyes of the public. I guess that’s the difference.
What a hero.
I also never heard or saw an argument based on supportable facts that showed getting additional education improved an adviser who had 10 plus years of experience. I personally have done the study and strongly support education as being important but as part of that it is important to realise that nothing quantifiable was shown by the people stating you needed to complete your education.
“but I’ve got integrity and a desire to further the legitimacy of our profession in the eyes of the public.”
Don’t forget your desire to charge the public more from your educated pedestal. Meanwhile poor Joe & Jill Blogs living out in the suburbs on a modest income can’t afford retirement advice but thats not your problem.
Hello people – it is being recommended/discussed QAR that more Personal Advice be delivered by unqualified employees of Product Manufacturers. I never seem to see the comments requiring education in those discussions – why?
They will be receiving a massive carve-out in the legislation that allows the ISF’s to employ call centre staff to provide advice over the phone – believe it or not – 2 sets of rules for the Industry. Hence, as a Profession it’s a case of 1 step forward, 2 steps back (with a lot of pain and suffering along that path).
Yes, but those expressing horror at the Education standards of real Financial Planner with years of experience don’t seem to say anything about ISF’s future proposed advice model.
I wonder why?
Because we know they are not professionals. We are, or at least half of us are.
So, you can only be a professional as long as you hold a piece of paper to say you have passed a course?
How many Accountants & Solicitors are there who hold themselves up as the echelon of all things “professional” have either embezzled monies from their firm’s trust fund or ripped funds off their clients ???
Education, knowledge, experience, emotional maturity, rapport, efficiency, fiduciary duty and empathy are the traits that make people a professional.They see themselves and act as professionals.
A piece of paper is an acknowledgement you have the ability to recall or regurgitate information in a limited time frame…..it is not and never will be the definitive factor in ” being ” a professional.
there is a difference between a Professional and a Profession. We have a few professionals working in an over regulated industry
FASEA was officially kicked off in April 2017. That’s 6 years ago. They were charged with the sole purpose of deciding on the meaning of a degree. A simple job that could have easily catered for existing advisers. In 2017 the meaning of a degree could have been 5 years plus expertise in Scottish Highland dancing. But NO, FASEA stacked with Academics, followed the conflicted FPA recommendations and the famous “gifting” statement. That’s where the meaning of a degree was gifted to FASEA by Dante De Gori to align with their FPEC body. 6 years on and here we are.
I note Dante De Gori is making an appearance at the FAAA conference. Perhaps aggrieved advisers should take it up with him and or boycott that conferance.
If that whole FASEA process doesn’t deserve a Royal Commission and some compensation to Degree qualified advisers I don’t know what would.
[b]If Advisers can lobby for a 10 year exemption 6 years after the fact it says a lot about Advisers that they can’t demand an explanation as to the FASEA process.[/b]
It also says that uneducated advisers of long standing are still influential if they move a lot of product for big insurance and investment companies. This decision has devalued the financial planner title once again. I never use the designation myself.
Regardless you’d be considered “one of those advisers” . You know the selfish ones that get compared to Hairdressers, they’ve always made excuses about never doing the education, and are prepared to see their colleagues sold down the drain. You know who you are because the rest of us are laughing at you behind your back. Not the way to finish a 20-year career.
100% spot on. Brace yourself for more excuses about experience, relationships and worthless pieces of paper. No mention of laziness or unwillingness to improve our overall image.
I know all the local advisers who whined about study and hoped for this exemption. I have no respect for any of them. They might not care, but our industry knows who us real professionals are.
Wow.
What a lot of vacuous, self indulgent crap.
Answer one question & one question only.
Will completing a so called “Professional” designation GUARANTEE to all clients the advice prepared, implemented, overseen, reviewed & managed regularly will be inferior or substandard?
According to ASIC and Treasury the answer is Yes…and that’s all that matters…and until that standard is reached Advisers will be seen as cowboys.
Given all the inconsistency and ambiguity around standards, there is now a real opportunity for FAAA to position CFP as the gold standard in financial advice. The real (not grandfathered) CFP requires a degree, and postgraduate level training and assessment.
However CFP will never be accepted as any sort of standard, as long as it is dragged down by grandfathered CFPs who never had to complete any university level education, and certainly no postgrad assessment. Now with the government’s “experience pathway”, many of these undereducated grandfathered CFPs will never be forced to get a professional level of education in spite of masquerading under a professional designation.
FAAA needs to sunset all grandfathered CFPs by the end of 2025, so that CFP beomes a genuine professional designation and a true differentiator, from day one of the new education standards regime.
most important comment on here
I will never do the CFP while it requires me to hold membership to a body I have no wish to be a part of.
I tend to agree. I am a CFP of nearly 20 years, earned the hard way, and the fact it bonds me to the FAAA regardless of any value add more broadly is a disgrace. This is why the Masters now is the only qualification that matters. You earn it, and you have it, no matter what.
So you’re saying my 2002 5 Unit CFP program, Economics / Accounting degree and Grad.Dip FP are worthless?
Definitely not worthless. But if you haven’t completed the postgrad level assessment unit (now called CFP Certification I think?) then you’re not a real CFP. If you want to meet the gold standard, just sit that Certification unit to convert your grandfathered CFP to a real one. You already meet the other criteria. But be warned, it’s harder than anything in a degree. That’s why it’s the gold standard.
according to the FPA submission to FASEA Yes it is worthless. .
Great comment, but they wont, they want the $. This is why sadly, only a Masters really now means anything. CFP is tainted with cereal box certificates from 20 years ago.
The lowering of educational requirements is a sinister attempt to dilute the efficacy and monopoly of financial advisers in a booming market whilst simultaneously appeasing the super fund gods.
Soon enough, advisers will be forced to compete against heavily subsidised fund-advisers and will be vulnerable to highly competitive fee pricing. Those without a degree will possibly be more vulnerable and may have to pay the price.
Gradually, advisers will realise the cost of a degree will seem inexpensive and the effort justified, in retrospect.
The solution is to level the playing field & get rid of the Annual Fee Consent Forms, that do not exist in any other nation on earth. Until then, the super funds will continue to drive out Degree Advisers.
I suggest everyone take a deep breath, and divert their anger to the cause of this nonsense – the FASEA board. Thanks to them we now have:
a) Thousands of already highly qualified advisers, who wasted huge amounts of time and money on courses that benefited no-one;
b) Financial advisers with qualifications which took less time to complete than a hair dresser, which will allow those who seek to denigrate our profession, the opportunity to do so; and
c) An unworkable Code of Ethics which is causing huge problems for advisers behind the scenes, and which needs urgent fixing.
The FASEA board needs to be held to account for the damage they have done to our profession
You can add Kelly O’Dwyer, Jane Hume, Josh Frydenberg, Kenneth Hayne and pretty much every other FS Minister over the last 20 years, plus FOFA, LIF, Treasury, ASIC, the FSC, the ridiculous and costly 2021 FFNS remediation program that caused much more pain, stress and cost than it delivered, and every other conflicted bureaucrat – to the list that needs to be held to account.
You forgot to add the Bank Execs that forced the Hayne RC, and not one of them have ever been held to account for the massive destruction to the Advice Industry that has occurred ever since – Professional Advisers have truly been the scapegoats for every wrong doing by everyone else but the advisers
10 years of experience as an Adviser is far more valuable than the few Financial Planning subjects taught in University Degrees (which usually overlap or borrow from the DFP/Adv DFP anyway). What is the knowledge gap? Is there any??
Clients would be far more receptive to an experienced adviser than an academic one.
My opinion.
That’s not the point. It’s more about consumer perception of all of us. Seeing a Financial Adviser is a mixed bag of chocolates.
“That’s not the point.” I believe you lost the argument right there.
I guess you would prefer the lady at the local pharmacy operating on your brain with her HSC high school certificate and 25 years experience talking about aneurism medications and liasing with the doctor next door, onya mate!
https://www.ifa.com.au/news/33256-actively-encouraging-super-funds-to-deliver-advice-is-a-big-ask
That seems to be the idea being considered in this article? Perhaps worry about that?
Studies and polls of every day consumers consistently reveal they WANT us to be more qualified. YOu, like the rest of you, are looking at this from your own perspective and benefit, not that of the public.
So, if an adviser has been making the same mistakes or sub-par recommendations for a solid 10 years, they are deemed to have met the education requirements. Please explain!
George, Do you have proof and research that only non-degree qualified advisers are the only advisers that make mistakes and sub par recommendations or continually make the same mistakes or sub par recommendations?
Please as a professional please ensure that you understand the Code of Ethics is not just about the advice we provide but also about our values which include trustworthiness, competence, honesty, fairness and diligence. Something your comment fails to meet which include standard 10 and 12.
Even though my study is coming to an end and I will complete as was required, I have found personally that the only benefit I received from doing all this study other than a few reminders is that it confirmed that I had completed a lot on ongoing training and that I learnt nothing other than to write long winded paragraphs to appease some faceless person at an education institution.
Please consider the Code of Ethics when making broad, baseless and emotional comments.
Thank You
Hiding behind a code of ethics to stifle debate is pretty poor.
Not stifling debate at all, he’s actually joining in with his view. Definitely not as ‘poor’ as hiding behind ‘anonymous’ comments (yes, I acknowledge the hypocrisy, please enjoy 🙂 and using the sole definition of a ‘professional’ as holding a piece of paper…
Nothing in George’s comment mentioned a degree. I wonder who is the one making “broad, baseless and emotional comments”.
SO, the “excuse” that advisers left as they decided against the education uplift are speaking porky pies. The reason they left was they had to complete the Industry Exam and actually didn’t know enough about the legislative framework of the industry they have “worked so long in” that they walked away. Had they done the exam and waited, they would have been eligible for this exemption. As disgraceful this experience pathway is, at least it only applies to those that actually completed the Industry exam.
Perspective is a funny thing and is entirely dependent upon the view of each individual. The decision has now been made, we simply have to get on with supporting those who need our help to plan their future.
The best judge is the clients, who have “skin in the game”. Clients can judge under ASIC’s RG244 best interests duty if the advice is right for them. Secondly, clients can judge under FASEA Standard 6 if the advice is consistent with their longer-term circumstances towards their financial needs. Federal Labor wants consumer driven focus. Hon Stephen Jones, please bring back the missing financial advisers who after ASIC Industry Levy from 2018 to 2001, caused the drop from 28,000 to 16,000 and refund this Legislated levy fraud against those who did no wrong. Hon Stuart Roberts said in an interview that from the levy, Treasury was making 1.6 times ASIC’s enforcement costs. That is a lot of fraudulent smoke.
Could someone explain who would not come under the experience pathway? It is a very small cohort, and all of them commenced providing financial advice after FOFA was introduced. So I cannot for the life of me understand the logic behind this if we truly want to be a profession. I am 35 years of age and could qualify under the experience pathway. I happen to be degree-qualified and a CFP(R) but everything that was wrong with the individuals in the industry when I started will remain under these rules. I still hear of advisers wanting a return to trailing commissions. If you can’t look your clients in the eye and tell them you receive $x in commission, then you shouldn’t have been receiving it in the first place.
Always account for legislative risk.
I miss the 10 years to December 2021 by about 6 months though it’s now been over 11 years since being authorised. I have a degree but need to add more study. I’m sure this will get some backs up but I’m questioning whether I bother. I truly love what I do and want to continue. I specialise in retirement planning and have made a massive difference to many retirees lives but with single parenting 6 & 8 y/o daughters & running a small business I am already stretched beyond. I want to stay and plan on trying to complete the extra study but don’t even know if I’ll be able to find enough hours while giving my kids what they need and keeping the business profitable.
I feel the anti -legislation crew have missed the point. I do agree that the exemption went too far and should have been a minimum of 15, preferably 20 years to truly qualify as experienced, but as a 62 year old adviser with over 25 years experience and an aging client base, it is welcomed. Many of that aging client base have been clients for over 20 years. It will mean i can continue to help my clients through a difficult time of their lives as they lose their spouse and are often left on their own with few people to trust.
nice bit of gaslight journalism here. click click click
I’m glad I’m at the back end. Who would enter this game ?
How can we possibly be taken seriously when we cannot even agree on education standards? Experience pathway should never have happened. We came close to becoming a profession, the Govt and the people too lazy to upskill (yes, I spent the money too) have shown that they prefer us as an industry.
of course its a disgrace those people with vested interests will jump up and downs and make noises the harsh reality is every profession has made its people do a degree except financial planning. to think that someone with no formal education can manage millions of dollars is nothing but farcical. consumers is none the wiser of who they speak to so we take advantage of these consumers as an industry accepting this garbageness. the greedy corporate people and super funds people and industry bodies peoples that relies on members fees and sponshorpships and plus old sales people dont give a damn about the improvemebt of the industry as much as they care about their ability to make a profits for exotic homes in bali. to sweep the broom clean floors has been lost and all the greedy people continue on their merry way gleeing delight
yeah, imagine how terrible it would be if politicians weren’t qualified in their respective portfolios? I mean sheesh, the Minister for Health having no formal medical qual’s, the Minister for Defence having no military expertise, Minister for Education having no educational experience, The Minister for Business always having been a career politician and never owned a business or done a MBA, or worst still, the actual Treasurer for the entire country having zero commerce, accounting or financial background?????? So fortunate that for the highest responsibilities in this country, that we follow your logic and examples!!!!
“Advisers still need to pass the exam” – Is that the “FASEA Adviser Exam” and not the bridging course Ethics or Regs units??
The mishandling of financial advice reform over the past 20 years and for that matter the whole financial sector by successive governments is a disgrace.
Nothing good has come of handling the issue of watering down education standards.
We now have a two-tier system of highly competent, capable and educated advisers and the other rabble. I receive constant feedback from prospective clients about what is out there and it is truly scary.
I don’t know where any other profession where this would be allowed. Standards need to be high to protect consumers. I continue to shake my head in disbelief.
It’s actually much more than just education. The Government and treasury have made a complete shambles out of this Industry over a long period of time, through ill-considered and hastily implemented legislation. It appears as though advisers cannot escape the massive, conflicted imbalance of power in Financial Services that follows the money trail all the way to Canberra.
You could perhaps discontinue shaking your head in disbelief and get on with serving the many thousands of clients who need sound financial advice. I meanwhile will discontinue shaking my head at the myriad of “degree qualified” advisers who have had action taken against them by ASIC over the years.
So, if you are educated with mostly irrelevant to real life course content you avoid being the “rabble”? I have been a risk specialist since 1987 and completed all the relevant courses from LUATC to DFP and onwards and I will bet that my knowledge of my industry, my client’s needs and service are superior to a degree qualified new entrant. I take sharp offence to your comment on behalf of all qualified and long-term experienced advisers with a clean record.
It’s actually a 3 tier system StuV
1. Highly competent, capable and educated advisers whose degrees FASEA refused to recognise
2. Those who avoided getting degrees for most of their careers, and recently completed mickey mouse FASEA degrees
3. Those without a degree
This article, and many of the comments, attempt to portray the situation as binary. Those with degrees, and those without. But there is actually a large and important third group. Those with older degrees and post grad qualifications that FASEA refused to recognise.
This group is ideologically aligned with professionalism and the need for higher education. Far more so in fact than those who only recently made an effort to get degrees. But from a practical point of view this group is largely supportive of the experience pathway, because it is a workaround solution to FASEA’s incompetence and corruption.
Grandfathering was necessary to both recognise the credentials of the encumbents and to try and stop the haemorrhaging of adviser numbers. A sunset clause would have validated the bona fides of those who took the trouble to undertake the study and would have restricted the numbers able to use the “loophole”. I guess we shouldn’t be surprised that burearocracy has failed us, yet again!
It has been the most pathetic rollout of change. Gave up my AR because I did not want to have to incur a debt for further study at my age nor actually do further study despite having been in the industry most of my life. Then found out if I had kept my AR I would have met the 10 year rule. What an absolute palaver! If the industry can’t manage this then no wonder clients can’t trust advisers. An absolute joke.
Hey Anon I’m happy to work out a deal with you and your orphanes client’s.
There will be winners and there will be losers, such is life.
Couldn’t afford $3,000 and a couple of lost weekends? Glad to see you go actually because it does make the rest of us appear more professional. That could be argued of course. But Yes I am sympathetic as you have well and truly been FASEA’d. Sadly we all got screwed over by FASEA some like you more than others.