AFA News 6 October 2022. The AFA has welcomed the Government’s consultation paper on addressing the Education Standard for financial advisers. We strongly support the commitment by the Government to provide greater recognition for prior learning and experience, which we have long argued for.
The consultation paper, which was issued on 23 August 2022, put forward the idea of an Experienced Adviser Pathway, along with proposals to increase the level of flexibility for new entrants. The release of this consultation paper on the back of the consultation that the former Government did late last year and early this year, is a clear sign that the Government is concerned about the loss of advisers and the implications for access and affordability of financial advice.
Greater recognition of prior learning and experience
The AFA supports advisers having the option of pursuing a limited Experienced Adviser Pathway or alternatively choosing to do further education, but to a realistic level and in areas that are of relevance. We believe that existing advisers should have this choice, rather than what the Consultation Paper seems to suggest of an Experienced Adviser Pathway with no additional study requirements or sticking with the existing FASEA education standard.
To achieve greater recognition of prior learning and experience, we have suggested either changing the education standard for existing advisers from an eight-subject Graduate Diploma to a four-subject Graduate Certificate or providing credit for experience through the provision of up to 3 subjects for those with 15 or more years experience.
Experienced Adviser Pathway
The AFA is supportive of an Experienced Adviser Pathway, however, we believe that it needs to be modified in order to ensure that it makes a real immediate difference, but at the same time does not undermine confidence in financial advice as a profession. For that reason, we have proposed the following requirements for the Experienced Adviser Pathway:
- 10 years of experience over the 15 years up to 1 January 2022 (as opposed to the Government proposal of 1 January 2019),
- The completion of the Ethics subject,
- A clean record, and
- A 10-year sunset clause, allowing advisers who choose this pathway to continue to practice until 1 January 2032.
Greater flexibility
The consultation paper proposes greater flexibility in the study that new entrants would be required to complete. Whilst we broadly support this, we also believe that the increased flexibility should equally apply to existing advisers who choose to do further study. This is a point that we have repeatedly made. Whilst increased flexibility for new entrants is important, there should be a requirement for a broad knowledge base, and this is an area where further consultation is required.
Joint associations submission
The AFA has worked with a number of other associations to put together a joint submission on the Experienced Adviser Pathway, which broadly reflects what we have proposed above, including a 10-year sunset clause and the requirement to do the ethics unit.
Please click here to access the Joint Associations Working Group submission on the Education Standard.
What happens next?
Now that submissions have closed, the Government will consider the feedback and then make an announcement as to what action they intend to take. We are heartened by the repeated statements by the new Minister (Stephen Jones) that this is an issue that must be fixed and fixed quickly. At our recent conference, he made it clear that this was an election commitment that he will implement. We hope that this is finalised before the end of the year so that financial advisers will understand where they stand and what they need to do to comply with the education standard. The sooner we know that the sooner they can get started in doing what they need to do.
To access the AFA submission on the Education Standard please click here.
Please address any feedback on this submission to policy@afa.asn.au.
Issued 06.10.2022. AFA Policy & Education Update
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