On Thursday 16 December 2021, the Government issued a policy paper on changes to the Financial Adviser Education Standard. They have proposed a fundamental redesign of the financial adviser education standard. We envisage that this proposal will be warmly welcomed by many of our members, but also opposed by a large number.
It is important to note that this is a proposal paper and has not been put into force. It is subject to consultation, and it could be changed before the Government’s position is finalised. It is only possible for the Minister to make these changes after the responsibility for standard-setting is transferred back from FASEA to the Minister on 1 January 2022.
We have been arguing for better recognition for prior learning and experience for a long time. We had hoped that this might be delivered after Treasury took over responsibility for Professional Standards. We were not expecting the Government to have gone this far, in terms of the proposal for experienced advisers. This might suggest an acknowledgement by the Government of the impact of the FASEA reforms on adviser numbers.
We know that many of our members will be uncomfortable with this proposal and will be concerned that this will undermine the recognition of financial advice as a profession. Everyone who has strong views is encouraged to make a submission to Treasury.
The AFA has long supported an increase in the minimum education standard for financial advisers, however we have also consistently argued that there needs to be better recognition of the prior learning and experience of advisers. Finding the right balance with this is going to be challenging. The AFA will carefully consider our position before finalising our submission. We need to take into account both the short term and long term interests of the financial advice profession, along with that of the Australian public and their need to have access to great financial advice. We are supportive of this process and confident that a sensible outcome can be achieved that better recognises prior learning and experience.
The AFA recognises and congratulates the many members who have already completed or are well progressed with their study to achieve the education standard.
The proposal paper sets out two pathways for complying with the education standard:
- The Experience Pathway, where anyone who has 10 years experience, out of the last 12 years on 1 January 2026, would only need to have completed the Code of Ethics subject, provided they had not been the subject of a sanction by the soon to be created Financial Services and Credit Panel.
- The Qualification Pathway, where an adviser would need to have completed 8 units of study in a related field of study (as set out in the policy paper) at the undergraduate level or higher, including the Code of Ethics subject. Existing advisers would have access to up to two credits for the completion of coursework that is currently recognised by FASEA (i.e. Advanced Diploma in Financial Planning and Professional Designations).
The FASEA exam remains a requirement for both pathways. The Qualification Pathway will also apply to new advisers, which will allow much greater flexibility for new advisers to enter the financial advice profession.
Consultation on the Education Standards for Financial Advisers Policy Paper closes on 1 February 2022.
Please click here for a copy of the Education Standards for Financial Adviser Policy Paper.
We know that this consultation process is going to generate a lot of opinions and we are already receiving feedback from members. We welcome further feedback from members on the Education Standards Policy Paper to policy@afa.asn.au.
Issued 20.12.2021. AFA Policy & Education Update.
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