Whether one sees election campaigns as an opportunity to have one’s voice represented in the polity or an “advance sale of stolen goods”, the fact remains that this time around, advisers are in the spotlight.
You’ll recall that, late last year, Labor MP Stephen Jones reiterated his criticisms of the current Government’s handling of FASEA and financial advice in general. Pointing to the exodus of around 11,000 advisers since FASEA’s introduction as evidence of the “egregious injuries Scott Morrison has inflicted on [the advice] industry,” Jones promised that a Labor Government would adequately recognise experience as a component of an adviser’s professional qualifications.
Specifically, Labor would no longer require advisers to undertake a bachelor’s degree if they have a “good record” and have already accrued 10 or more years’ experience on the job.
Just over a week after Jones’s speech, Treasury opened consultation on an amendment to the current professional standards legislation, the effect of which would – more or less – achieve the policy setting he proposed. Per Treasury’s proposal, from 1 January 2026, “individuals who have 10 or more years of full-time experience as a financial adviser in the last 12 years will only need to complete a tertiary level unit on the Code of Ethics in order to continue providing financial advice.”
Those who use this experience pathway must, as Jones also suggested, “have a clean record prior to 1 January 2026, meaning no sanctions from the Financial Services and Credit Panel (FSCP), excluding warnings.”
For now, let’s put aside the question of whether these (very) similar proposals amount to “too little, too late” for advisers. Instead: would the effect of this change be a net positive?
As we noted after Jones’s speech in December, these proposals are likely compelling to those advisers who have long held that FASEA swayed too far from the intent and wording contained in the explanatory memorandum accompanying the original Corporations Amendment (Professional Standards of Financial Advisers) Bill. Should the experience pathway be implemented, a significant majority of the advisers would qualify.
While sentiment towards both Labor and the Government’s proposals has been broadly positive (at least from major industry spokespeople), the FPA has urged that “great care” should be taken with any amendments to the education standards. Moreover, one could easily imagine that an adviser who has already invested the time (and money) in meeting the current degree qualification standards might take issue with the idea of all that effort suddenly becoming unnecessary.
But if we accept that the introduction of the experience pathway would be a generally positive move – and one that would have a “significant impact on [advisers’] careers, choices and mental health,” as Stockbrokers and Financial Advisers Association (SAFAA) CEO Judith Fox recently argued – it’s worth asking what else should be discussed on the campaign trail. If you had the ear of a prospective new Labor or Coalition Government, what would you say needs to happen at the policy level to improve the availability, affordability and sustainability of financial advice?
Is a reversal of one of FASEA’s most controversial decisions really enough? Or should each party be offering more to the advice community? Let us know.
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