On 3 May 2023, the FAAA made a submission to the Government in response to the draft legislation on the Experienced Adviser Pathway.
The FAAA (and previously the AFA and FPA) supports increased recognition of prior learning and experience for all advisers. We also support the Experienced Adviser Pathway, however consistent with previous submissions and statements, believe that it should be better targeted at experienced older advisers.
Whilst, the FAAA and previously the joint Associations Working Group have proposed a 10 year sunset clause and a requirement to do an ethics unit, for anyone who qualifies for the Experienced Adviser Pathway (EAP), it is clear that the Government is intent on moving forward with the EAP broadly in the proposed form.
On the basis of the draft legislation, all existing advisers with 10 years full time equivalent experience between 1 January 2007 and 31 December 2021 will qualify for the EAP, provided they have not been banned, disqualified or subject to an Enforceable Undertaking before 31 December 2021.
The FAAA undertook a member survey, which revealed that 50.9% of members support the EAP. Since first announced in December 2021, the EAP has generated strenuous debate, with strong views on both sides. The survey shows that the level of support would be much stronger if the 10 year sunset clause and ethics unit were incorporated.
In our submission, we have focussed on the calculation of the 10 years full-time experience requirement, noting that this could be difficult for advisers who have taken career breaks or worked part-time. With records often not readily available, we have also suggested that licensees should be able to rely upon the declarations from advisers.
We have also advocated firmly that the pathway that an adviser has taken, should not be disclosed on the Financial Adviser Register. We believe that it would be confusing for clients and also divisive for advisers. Now is the time for the financial advice profession to come together on this issue and be supportive of all advisers who are eligible to practice.
This draft legislation also includes two other measures, being the introduction of greater flexibility for the approval of education for new entrants, which we support, although believe that it should be extended to existing advisers, and the removal of tax education requirements for tax agents (which we also support).
Please click here to see a copy of the FAAA submission.
For any questions on the Experienced Adviser Pathway submission, please email email@example.com.